Gas or electric heat for my rental

[Ed Riemer]

I'm completely renovating a new rental property in Catonsville next week and am trying to decide on gas or electric utilities for each property and can't find any real definitive suggestions either way with good reasoning. Have any? They're both going to be very nice 2 bed units renting at $1500+

[Michael Gansberg]

@Ed Riemer - very glad you're asking this question. People will debate efficiency on your question, but bottom line- if you're in Maryland, you need to heat with gas. It will be cheaper for the residents as compared to some idiotic solution like electric baseboard, and cheaper by a good deal. I've heard the old argument, "You're not paying for it, so why do you care?" Will you care when prospects see that you've installed the most expensive heating solution, and decide that they'd rather rent a place with affordable utilities? Because that's what's gonna happen. I've seen it over and over.

Or what if you get an unsophisticated tenant(by the way- do you really want one of those?) who doesn't know the difference between electric baseboard and gas heat, but calls you monthly during the winter complaining about the high utility bills, and breaks the lease early? Or doesn't renew? Either of those will raise your costs of ownership.

Or how about when you sell your building to a sophisticated investor? Trust me, they'll roll their eyes when they see electric baseboard heat, and they'll say, "You know how much this is going to cost to convert to gas heat?"  It will effect your selling price, and not in the way that you'd like.

Yes, it's cheaper to install electric baseboard heat. But you'll pay later, one way and another, and another.