To HVAC or Not to HVAC...That is the Question

[Roger Laughary]

Ok folks,

This seems like a no brainer to me, but I'm not too proud to run it past people more experienced to make sure I'm thinking propertly.

I am closing on a 3BR, 1BA, 1,000 sq foot home in 4-5 weeks. The house is in very good condition, other than it has no central heat and air and some countertops and laminate in the kitchen. That's it. I bought it for $55k and I believe the house to already be worth $65k-$70k with around $1000 spent in the kitchen and $1,000 - $1,500 spent in flooring and paint throughout the house. Houses like this in this neighborhood rent for around $750. However, I think If I spend between $6k and $7k to put central air in it, it will match comps in the area up to $75k or so and have a huge upgrade. I believe it will be much easier to get better renters in there with new HVAC.  I also think I could charge up to $100 more for rent.

The downside is that investing this money into this house could slow me down by 3-6 months from buying two more instead of one more after this one.

I think I should do it.

What would you do?

Go!

[Shane H.]

@Roger Laughary

If you bought this house in Wichita I'd put it in.  Our weather hits all the extremes, I think most good quality people expect cent/heat & air.  Maybe not 20 years ago, but now yes.

In that rent range you will need to be very selective on your tenants, the more amenities you can offer and the more you can weed out people over the phone etc, the better off you'll be.  Good renters are going to look for perks and amenities.  Dont scare them off by having window ac units or an old crappy wall furnace.  I'd spend a little more money to attract a high quality tenant as I believe in the long run that initial investment will end up costing you less by NOT having to settle for someone who will tear up or destroy your property, evictions, etc.

I'd definitely spend the coin if you plan on keeping it.  I'd just go basic on the heating/air unit and have someone pick you up a decent commercial unit (something that would be installed at apts like Concord brand) at Washer Specialites near downtown or one of the supply houses in town or someone who can even sell you a used compressor for outside, and all new stuff inside etc. I'm sure this will cut the cost of the install. (Make sure you do not go cheap and undersize your ac unit, you'll regret it later in maintenance calls or complaints of it not cooling the house off enough when it's triple digits and 75% humidity)

 If you need any wiring done, check out Bybee Electric - they'll get it done quickly and efficiently.  Probably not bottom dollar, however, reasonably priced and they stick to their word.  

Congrats on the purchase.