4Plex--Change from gas Boiler to Electric heat?

Rehabbing, Fix and Flip, Rental Properties
1

Classic brick 4 plex built 1902, in so-so neighborhood in cold Minnesota. Big 2BR units rent for $600/mo. The furnace & boiler pipes are old, possibly lead, with asbestos coverings here and there. The heat bill runs $1000/month in winter, owner pays. I’m changing old leaky windows, adding insulation, etc. as best I can. Putting elec. heat in (and charging tenants for it) seems the obvious solution, and would probably help me sell it later too, as owners like tenant-paid utilities.

Or should I just replace the furnace/boiler? Zoning and splitting the bill among tenants is possible, as long as it’s fair. Low income tenants could get heat assistance payments. I’d hate to rip out the old radiators, they add to charm (but not to rents I can charge). I worry about messing with the asbestos and lead pipes; building inspector seemed didn’t have huge issues with the way it is now. Ideally, I’d just leave them in place in the basement.

What can of worms might I be opening up if I take the building all electric? The electrician says I’ll need 100a-150a breakers (all 60a now) and nine baseboard heaters and seven thermostats per unit.He hasn’t given me a solid number (I trust him), but he guesses $4000-5000 per unit. Is it worth the hassle and expense? What else should I be aware of in my pro-tenant town?

2

Hell if he is going to charge that much put in gas forced furnaces and air. Splitting utilities is very tricky and if they are not paid you cannot turn them off without affecting other tenants. And you will never win in court. Too many variables. Square footage, how warm some people want it compared to others, there just isn’t a fair way to divey them up and you will always be ruled against. You can try to compensate with higher rents but then you have marketing challenges.

3

Good point. Another issue is who controls the gas and elect. If the city does, unpaid bills may be put on property as a lien (owner is sometimes responsible for utilities utlimately) , so you’d be out even if you make tenant responsible.