All Forum Posts by: Account Closed

Again, this is an assumption only an ignorant person would make. You HAVE to research them each individually, EXACTLY the same as a home! Key words there are "typically" and "usually". Those are not synonyms for always. You cannot possibly know what each HOA is like, they are all different, business or otherwise.

"but since we're talking about commercial real estate the properties owners are also likely to be of a more sophisticated nature e.g. corporate owners, business owners, sophisticated investors, etc. "

 This is also a REALLY IGNORANT assumption! I've had plenty of experience in commercial real estate. My experience is that commercial building owners are as stupid as everybody else in the world. People who own commercial buildings are no more sophisticated that people who own houses. Many people who own commercial buildings have them because somebody died and willed it to them, and they know absolutely nothing about their building or how to run it. I have met several of these owners.

Assuming that "business owners will always do you right because they are smart" is possibly the worst advice I have ever heard.

Maybe, but there is no reason it needs to be or even should be done that way. First of all, forget gas. The fewer utilities you have at your rental property the better. Go all electric. No gas means less risk of a gas or CO leak also. Electricity is also probably already available and separately metered to each unit. No gas lines to run. It was stated these are 850sq ft units. There is no need what so ever to install a completely new forced air gas system with new duct work for something that small. A small ductless system cost less than $1000. Installation might cost another grand. That's a total of $6,000 for the entire property, professionally installed. Forced air gas is old technology. And don't forget, if you gain air conditioning where you didn't have it before, you can charge more rent.

If you really wanted to go cheap you could install a few wall mounted electric heaters throughout the unit, but they would cost a lot to run.

I would consider it only if the leases already in place are strong enough to control these people, or short enough that you can get rid of them soon. You'd need to start with a strict anti drug policy and kick out anyone caught breaking it. You will need a number of other specific rules to control these people. You can't make new rules until their leases run out though. I think lower class properties need more strict management, and don't be afraid to boot them if need be for the good of the property.

Another relatively cheap option could be electric baseboard heat for each unit. Shouldn't be more than a couple grand per unit, but it would cost more to run and no cooling.

Sounds like the AC guy knew he could get away with charging you too much. That is definitely not true. A 2 ton mini split should run on a single 20 or 30 amp circuit. An electrician shouldn't charge more than a few hundred to do that. Depends on how far the line needs to be run.

The refrigerant lines are easy to run on on the mini splits. Many of them are designed for DIY install, they come with precharged lines that you run. It's just flexible copper tubing, not very hard to install through the wall. If you hire a guy for this, again, it shouldn't be much more than a few hundred bucks in labor. There is no brazing/soldering or vacuuming out the lines.

I'd guess in a worst case scenario you could get a $900 mini split and spend $1000 on electrical and $1000 on installation, but that's only if it turns out to be a difficult install for some reason.

A slightly more expensive option could be to install multiple heating/cooing indoor units to one outdoor unit for each tenant. I'm not sure how your units are setup in regard to air flow. Still nowhere near $10k.

Well, it does sound difficult to zone out your building with the current system. Its hard to say without knowing the building, but I think your best option would be 3x heat pumps, then you have the advantage of air conditioning, and, you can get rid of the the natural gas service if you're not using it for anything else.

As for the cost, I'm a bit skewed because I can install all that kind of stuff myself. Most people need to hire an HVAC guy, but I find $10,500 per unit to be absurd. How many tons is that?

You can buy a 2 ton mini split unit for around $900. Here is a random link from google:

http://www.alpinehomeair.com/viewproduct.cfm?produ...

That should be enough to heat/cool up to 1000-1500sq ft. 

Then they would just have one electric bill, no extra heating bill.

Who told you that and what in the world are they doing for that much money?! How big of units are we talking?

You could install an entirely new heating system in each unit for probably $2-4,000 or less. You may not even have to go that far. You can also install BTU meters for each unit, these measure incoming water flow and temperature, and outgoing temperature, and calculate how many BTUs are used. Then bill accordingly.

I would just guess that the existing boiler could still serve one unit, and then you'd only need to buy two new boilers for the other two units. If that cost $15-30k you're getting raped.

You can just divide up the gas bill if you want to, but, that's not a very professional way to manage a property, and it's probably going to create complaints. Everybody will claim they didn't really use that much if you can't prove they did. What if there is a big spike one month, do you make all three tenants eat it? Maybe just one left the heater on and the doors open. Smart tenants know this and avoid properties without individual meters.

I'd also go for water meters if they're spending much on water. People waste water when it is unmetered, this has been proven true.

I think some of you are looking at this from the wrong point of view. First, the payback is going to be a long time no matter what, so it's probably not a great investment.

With that said, just because your building has solar panels, does not mean you need to provide your tenant with free solar electricity. You can bill them for it. Or you can sell it back to the power company. Laws on this vary greatly from state to state. This is what the solar panel companies do when they lease solar panels to somebody. They install panels on a house and then charge the home owner for the electricity generated. Also, if there are any common areas or outdoor areas that use electricity, the solar could be put solely towards that to save the owner money.

How long it would take to generate money would be hugely different from state to state. To make any real money you'd need to do it on a very large scale with a very large investment. I think a better investment would be solar heating, but that would be hard to monetize in a single family property.

HOAs can be helpful and they can be hurtful. To say they are all automatically good without knowing anything about it is totally wrong, don't ever assume that. Each and every one must be researched individually. I own a house in a HOA neighborhood and I would sign an agreement to dissolve it in a heartbeat. The HOA had good intentions when it was created in 1995, but has since turned into an overgrown, overspending, overcomplaining monster. In my opinion they are only hurting property values because a lot of people around here know how bad it is and avoid it.

I would be less annoyed if my neighbor painted their house pink with yellow dots than what the HOA does on a consistent basis. They don't bother to maintain what they are supposed to maintain, either...

Without more information, that cannot be said. We do not know the details of this "HOA" or why they are trying to dissolve it. They are not always beneficial to the owner. And they are not always relevant to a property that might have been built 10 or 20 years ago...