Utilities/Separating Gas

I’ve been reading the posts the last few days and after completing my 1st investment I’ve already learned from a few of my mistakes and know what I will do differently the next time. I wish I would’ve visited this site earlier!

I have a 3 1-bedroom multi-family which has one furnace for the entire builing and the thermostat is located in the 1st floor apartment. I’m sure you all see where my problem lies. As the winter has lasted longer than I’ve liked gas bills are beginnig to eat at my profits.

What are some of your suggestions if any on what may be done to fix my situation? All criticism is welcomed. I feel its a good building other than this problem. Area is close to downtown, up an coming area, rents can be higher than they currently are and the note isn’t that bad. I just know I’m going to dread winters when the heat becomes an issue (it already has). And no there is not A/C I don’t have to worry about when it get hot outside. This heating/gas is my major problem.

please help seasoned investors!

What have others done when encountered with this problem?

You need to get an estimate to separate the Gas service and get separate heating units in each unit…this will probably fairly expensive…

Is each unit on its own electrical meter? If so, good…if not how do you apportion electrical service?


If you want seperate utilities (everyone does) then the best properties to look at are ones that are seperate, or properties that have freeze damage and are vacant. If the property is vacant and the existing heating system is distroyed then paying the costs to seperate utilities is worth it. But it is difficult to justify the costs of seperating the utilties when there are tenants in the property and the current heating system is in good working order. I am looking at a 60 unit that is vacant and the pipes and boilers are distroyed due to a power outage. So for me to pay to seperate the heat and electric won’t cost too much more than fixing the existing system.

For this property you want to blow plenty insulation in the attack and the walls or you want to pay someone to do it. This will more than pay for it self in one winter. Then you want to replace the furnace if it is very old. If your windows are old you may want to replace them. If you can’t replace the windows then you want to buy plastic for all the windows in every unit around mid October. Even if you do replace the windows you always want to have plastic on the windows in the winter.

Try and have a very efficient property.

Thanks for some replies.

To Answer your question Keith the electic is separate for each unit, which as you know and as I’m finding out in reference to other utilities is very, very good. By city code landlords have to pay water but this is the least of my concerns. Do you have any idea what costs I may be looking at getting heat separated? 3 units and 2/3 are month to month with hot weather coming around maybe it would be good to looking into getting separated if possible.

Have you or anyone else ever done/gone through this process with any of your properties

Well, one apartment (the one with the thermostat should be good-to-go – you just need to block the ward air so that it stays there…

Other two will need to have some sort of small furnace, probably some duct work, gas piping work, and some elecrtical work (thermostat, electrical feed for the fan motor, etc.)

I had a new gas furnace installed in Louisiana for $900 for a 1200 sf house – maybe $1500 per unit…?

Someone here can probably do a better ballpark figure for you.


What about electric baseboards in each unit?

Electric baseboards is a good point! One Property Manager and no not Mike mentioned baseboard as a good way of transfering heating over to the tenant.

Taking what Keith said would it be possible to leave the furnace which is around a 1 year old and replaced before I bought and heat the first unit and install baseboards in the other 2 units?

What are peoples experience with installing of baseboard and what have you spent installing baseboard? Experiences with baseboards?

Thanks for the help

The plus side of baseboard is low maintenance, definitely don’t have to regularly have them serviced like oil furnaces. I have electric baseboard and it’s definitely cheaper heating this year than it was last year when I had oil heat. With electric your tenants can also have the bill billed equally over 12 months to spread out the extra cost of the heating, you can’t do that with oil. Call a few electrical contractors for quotes.

RE, I was going to suggest the baseboard as well, however, being the partner of a Master Electrician, who obviously does all of ours, I have to say not to take electrical as the easiest way out. Two things more you need to consider; how old is your building again and how much room is left in your current electrical service for each unit. My buddy electrician partner is forever cursing me every time I suggest electric baseboard because I forget about how he has to snake A LOT of wiring through these walls (because we chose not to rip them out and salvage existing walls) and depending on the size of your service and what it already uses is how to determine if there is enough room to handle the electric baseboard throughout a WHOLE TWO apartments! I’d say unless you know an electrician your talking some big bucks on this route as well.

You live in the city correct? Check in to public gas service as well, never converted to it myself, but have bought plenty with it existing. Just another option to compare price.

If you dread winters, is it really cold? Electric heat will kill your tenants for utilities expenses in a cold area. And if you are paying the utilities, a combo of gas and electric might be worse than gas alone.
Around here (upstate NY), most people avoid electric heat whenever possible. Way more expensive than gas.

You already have duct work installed, so that is one big hurdle done. Depending on the size of the units, you can get small furnaces installed with a gas line piped to each one. Not sure how the metering would work on that, but if you are paying the heating bill you wouldn’t need to worry about that.

I had oil in my last apartment last winter and it was even more expensive than electric. I actually don’t think electric is that bad compared to options like oil with an old furnace.

I agree with possible going with baseboards. That is what our apartment uses. We spread out the payments over 12 months so it isnt so hard on the wallet in winter. Although it hasnt been a tough winter this year, last winter was.

I’m certainly not an expert, but I know enough to be dangerous :biggrin

I’ve seen owners split the gas bill between all units…in your case 3. Look at historical figures and try coming up with an average monthly expense for them so that the winter months are not real high.

pro- simple and inexpensive to do

con- some tennants may feel that they’re getting ripped off becase “so and so” upstairs has their windows open all winter.

either way, it’s a thought.