Splitting Out Gas In a 4 Unit

[Dan L.]

Hi All.

I am purchasing a four-unit, all one-bedroom apartment. It is a very good deal, especially because of the value-add with the giant garage in the back. However, one problem is the house has only one electric meter and one gas meter. All units use the gas boiler for radiant heat. I'm closing on this house in a week or two.

I've already talked to my electrician, and I've got plans already set to split it into 5 electric meters (one for each apartment plus the house). Even though electric is a lot of money to split, conceptually it's pretty easy.

Gas is what I'm more concerned about (perhaps because I don't have a good gas guy). It is in Upstate New York, cold winters. I’m looking at purchasing four new furnaces, hopefully use most/some of the existing plumbing, and provide radiant heat per unit.

Any thoughts or comments from anybody who has done this before? I would rather do mini splits, but I think we get too cold up here and they don't work so well at 0 degrees. And I know that electric baseboard would be too expensive for the tenants.

Any suggestions what kind of furnaces to buy?

Thanks for your input!

[Russell W.]

I'm sure you've already done this, but I would strongly recommend talking to one or two more electricians to get their opinion on splitting the electric. It may not be as easy as your first guy makes it out to be...  Think about all the branch wiring that is likely shared from one apartment to the next. It's going to require a lot of new wire pulling and without access to common junction boxes you may be in for a headache. Just food for thought.

To the question at hand, splitting gas should be significantly easier. Depending on the number of appliances and types, you have a maximum of 4 locations per apartment to take the gas to; furnace/boiler, oven, hot water heater (if not common) and gas dryer (if provided). You mention wanting to keep radiant heat but also wanting to purchase 4 new furnaces. I assume you mean boilers? In my opinion trying to retrofit existing radiators from a common system to individual isn't worth the effort. Since you mentioned the mini-split I assume you're open to considering a traditional split system as well, and one other option is a "packaged unit". I've recommended them before on the forums because I've used them and like them so much. Take a look at the link below for just one of the manufacturers. They require ducting like a traditional system but the benefit is, as the name implies, it's one piece of equipment. And although you may not need it as much in upstate NY, it has the option to have cooling as well. Something to consider.

Edit: won't let me post a youtube link. Lookup Magic Pack, Comfort Pack, Condo Pack, etc. 

[Dan L.]

@Russell W.  

Hey thanks for a your input!

As far as Electric, I definitely recognize it is hard work, and my electrician does not say it's easy work, I'm just saying conceptually we're not reinventing the wheel - add meters, run wires. There's no equivalent of the furnace, there's no decision to go radiant or electric or forced hot air, etc… It's just adding a meter and running wires. Again, not saying it's easy, but the concept is easy. And I have this good relationship with the electrician, so it is also a weight off my shoulders because I know I can trust him... As opposed to heating, I don't have a great person like that

Thanks for the tip on the packaged units... Definitely looks intriguing! Have you used them before? The concerns that pop into my head are:

a)I don't see where it specifically says it is metered, and will bill back to the appropriate unit. Does it do that?

b)Will it be hard to find someone to install it, and going forward, will it be harder to find someone to maintain it?

c)I have never really looked into converting from radiant to forced hot air. Seems like it might be opening up a can of problems, since it would need a lot of carpentry work to run the ducts. I do like the idea of it having air conditioning, we don't have a lot of hot hot days in New York, but it gets to 80+ and humid quite often in the summer. Being able to advertise AC would definitely be a plus.

Thanks for your assistance!

[Dustin Murphy]

Hi Dan, I am an investor in the Albany area as well. I don't have any experience splitting units heat up but have you thought about maybe just billing the tenants back the utilities? I am looking at doing that for the water bill on my 3 unit but haven't pulled the trigger on it yet. Still in the research phase of how to appropriately do it. 

[Russell W.]

@Dan L.

You raise a good point with your concerns on finding someone to install/maintain it. Just depends on the area where your property is located. I would think you could find a contractor in any reasonably sized metropolitan area, and you can even reach out to the manufacturers for qualified installers in your area. Regarding the metering, it would be no different than your other gas appliances; each apartment will have one individual gas meter for all of the appliances within it, not for each individual appliance. I.e. 4 gas meters for 4 apartments. 

[Ryan Miller]

We just split gas within a three unit in a suburb just outside of Albany. DM me and I can provide you the name of the company that we worked with. Not cheap, and the unit needed to be replaced anyway, but there were rebates available and the work was done quickly. We split electrical at this house as well. 

[Sean McKee]

@Dan L. I understand the electric sub metering, however do you have to submeter the heat?  I have radiant heat in one building and have been able to factor the heat into the rent amounts.  I put a lock on the thermostat and set it to 70. It pretty expensive to redo the heating system.  It all depends on your market, but radiant heat is fairly common in mine.

[Dan L.]

@Dustin Murphy 

Here is a quick list of reasons why I want to meter the heat per unit…

1 It is hard enough to collect rent, I don't want to collect rent and heat

2 If they don't pay their heat, I can't cut it off the heat like the gas company can

3 They could go get some outside government assistance to pay their heat if they pay it directly to the gas company, I doubt they could get it to pay it to me

4 If they pay their rent, and not the heat to me, I bet it would still be extremely hard to evict

5 It is extra work for me!

[Dan L.]

@Ryan Miller Thanks!  Sent!

@Sean McKee The weather is too variable. We could have 2 weeks straight of 0 degree weather, huge heat bills. I would have to put so much padding into the rent that nobody would rent it. By using the meter, not only does it save me time, and keeps the rent down, it also increases the value of the place when I go to sell it

[Jeff Wydra]

Hi @Dan L.

Your post has caught my eye as I've just put a 6 unit building under contract north of Albany, and was having the exact same thoughts. The current owners gas and electric bills amount to 15k a year! If I could bill most of that back or get it directly metered to the tenants it would double my cash flow. Please keep me posted on what you find out and decide to do.

[Jeff Wydra]

@Ryan Miller

Dm coming your way good sir.

[Dan L.]

Just to close the loop... I have now purchased the property. We are in the middle of a light rehab (paint, floors (as needed), faucets, etc). After working with my electrician, and running the numbers on the cost to either add gas & electric meters, or switch to electric meters & heat… I decided to leave it alone. I will just keep paying the utilities and increase the rent accordingly.

The main reason is because it was going to cost somewhere in the $35,000 range to do both Gas and Electric… If I went with electric heat, it would have been a little less than that. It just didn't make sense to put that much money into such an old building. And really my goal is to do this light rehab, fill it with tenants, and then sell it. I don’t think it’d increase my sale price by $35k, so I opted out.

[Dan L.]

@Sean McKee Any suggestions for locking the thermostats?  How did you do it?  I would like to lock it on say 68 & not let tenants change it.  Would I take the thermostats out of each unit? Or just put a 'lock' on each?  They could just bypass the lock? (new thermostat, etc)

[Sean McKee]

I have one thermostat for the entire building and that keep in one unit. I used a basic one from Home Depot. This mostly does the trick. I did however have a tenant knock it off on accident ( I didn’t properly close it). They definitely can get in them if they really wanted to. They are more a deterrent and honestly if they are trying to break in them, they aren’t good tenants. They have higher quality ones or Landlord thermostat that are auto reset to certain temperatures. So you could put a case lock over the landlord thermostat. That should stop most people.

I have thought about these, but have not had a good reason to do it yet. Congratulations on your purchase.

[Dan L.]

Thanks!  They each have their own thermostats - which seems like a bad idea!  I'll have to get it re-wired.  What do you set it to?

[Wesley I.]

@Dan L.

Check with your gas company, they should have rules about sub metering. In San Diego, our gas company requires individual meters if appliances in the units are vented - (furnaces and hot water heaters). Sub meters will require more space than a master meter, and if you’re adding more gas appliances you need to check that your existing gas service can handle more volume/flow.

You will have to run new piping from your sub meter location to your appliances, then Have it tested by the city or whoever your AHJ is.

[Sean McKee]

@Dan L.- I set it to 70. I tried 68. I had way too many complaints about it being cold and was not worth all the grief. I haven't notice a huge difference in cost. So every unit can control the same boiler?  It depends on the cost of the rewire.  I think you can likely get away with just locking all of them.

[Eddie Torres]

@Dan L. Since you're already splitting the electric meters, it might be more cost effective to just add electric heaters instead of gas furnaces.