So, I recently purchased a vacant triplex in need of major renovations in Western Washington State. The house was built in 1928 and was a two story with full basement before being converted into three units with separately metered electricity. It now has a one bed one bath apartment in basement, two bed one bath in central apartment and one bed one bath in second story. The previous landlord installed baseboard heat in basement and second story and left the main floor heated by the 1970s era natural gas furnace. The original ductwork to heat the entire house is still present, but was covered up in the top and bottom unit.
I have had my HVAC guy look at the ancient furnace, and it's rusted out and the blower doesn't run. So I need to replace. In talking with him I asked about installing a new furnace and optimizing the zoning to run a separate zone for each unit, which he bid at $8500. But only one gas meter, so I would have to pay for heat in all three units. Another HVAC installer I know suggested three separate 80% furnaces, a little extra ductwork for about the same cost $9000. Just installing a new 95% furnace for the main unit is around $4000, plus a couple of the baseboards are pretty beat up so I would replace them as well.
I'm relatively new to real estate investment, and am scrambling to get the place updated and rented out but this issue has so many options I'm kinda stumped.
I would opt for just updating furnace and leaving separate baseboard units, however a landlord friend recently told me he pays for central heat in a fourplex, but raised rent to each unit to cover the heat and has been making money from the situation; and has happier renters who don't have to worry about an additional bill... So this leaves me with a few options.
Option 1: Update furnace and leave baseboard heat in upper and lower unit, leaving central unit to pay for gas. Cost approximately $4500 (furnace and five $100 baseboard units)
Option 2: Update furnace and add zoning, but one gas meter and I pay for heat. Cost, $8500 plus monthly gas bill. (But potentially raise rent to cover bill, however no incentive for renters to conserve heat)
Option 3: Update triplex with three new 80% efficient furnaces, and duct work. Cost, $9000 plus potentially much more for two additional gas meters from street.
Potential Option 4: My parents just updated their 10 year old furnace from propane to electric heat pump. The furnace comes with a natural gas conversion kit, and is free, however my HVAC guy says it is too large and will "short cycle" in the triplex because it has too large a blower. I have another guy looking into the issue, as I'm suspecting he just doesn't want to rework the old furnace to make it work....
As you can see, I have quite a few options. Any insight would be helpful.
Thanks!