Separating Oil heating?

So I’m looking at a multifamily to acquire as an investment property. Currently the heat is Oil Hot Water Baseboard. The current landlord pays for the heat of each unit in this 3 unit house. Would it be advisable to separate the heating? Install 2 new boilers, 2 new oil tanks and have the tenants pay for heat? Or just leave it the way it is? Any insight is appreciated.

Since it’s only 3 units, I would strongly consider switching over to electric baseboard heaters. The heaters themselves are very affordable. You can buy a 6 or 8 foot long unit for about $60 at your local home improvement store. Most of the expense for installing these heaters would be to get an electrician to install them (unless you can do it yourself).
The main thing is I would try to put the cost of the heat back on the tenants. They’ll keep it at a toasty 90 degrees if you’re paying the bill. The current LL might be factoring in the cost of heat into the rent, but I doubt it.
Boilers and tanks sound expensive. Get an estimate to install the electric baseboard heaters and compare that to your other options.

Another possible option would be to install window A/C and heat units. They make the all in one units now that serve both functions. They’re obviously more expensive than regular window A/C units. From what I’ve seen, you can expect to pay an extra $150-200 per unit to have one that also provides heat. I have no idea how well these work since I haven’t used them before. I just know they’re out there.

We have the electric baseboard heaters in our apartment building. They work great for those.

It is definitely advisable to separate the heating. I would never buy an investment property where I pay the tenants heating or utilities. I agree with Justin that electric heat will be the least expensive to install if the apartments have their own electric meters. The benefits are that you can control the temperature in each room individually. However, what you do depends on your market. In my area the good tenants know that electric heat is very expensive to run and will prefer another option. I’m in the northeast and it can get cold. My apartments are in a nice neighborhood and the good tenants prefer gas baseboard heating. They know that it is the least expensive to run. They pay as they go and there is not pro-rata adjustments with the landlord. If you can get away with electric heat and still get good tenants, I would go that route.


I’m not sure I’d worry about it. I manage a three unit multifamily and the owner pays for electric, water, and gas. It actually works out well. Once I walked in and saw the heater and AC on at the same time and just asked the tenant not to do it as we would have to raise the utility rates if the bills go up. Most tenants like not having to deal with those bills.

One problem I have is advertising as rents are higher. I get around this by separating the rent from utilities - my upstairs unit rents for $395/month plus $85 utilities. This allows me to adjust the utilities if necessary and advertise a lower rate.

I have a duplex without split utilities.
I have lock boxes on the thermostats.

I might try advertiseing a lower rate plus a utilities cost next time.
Most people don’t realize they are getting a good deal.