Rental Property Electric Vs Gas

Rental Property Gas vs Electric Heat

Chris's question: Do I prefer to buy rentals with gas or electric heat?

I'm not really sure what your question is, but I can speak to this. The difference between electric and gas, sometimes it's tough to rent a unit, tenants are not concerned about what a unit will cost beyond the rent when they're renting a unit. However, once they move in, the problem with electric heat is you're getting just one bill, so you're paying for your electricity, and if the heat is also electric, then you're just getting a massive, massive bill. I don't think electric is that much more of a cost than gas or oil heat. The problem is that you're getting a giant bill, whereas in if you have electric and separately you have gas as your heat, you're getting two different bills, two smaller numbers. It's easier mindset-wise to handle.

I think with electric, it could be a little bit of an adjustment for a tenant. My wife and I, we do own a property with electric heat. The tenant has adjusted to it. It hasn't been a real problem, but the tenants certainly do contact us and say, "Hey, what is going on? Why are these bills so large?" They were kind of blindsided, not expecting to get such a big bill. So if I had to choose, I would probably say gas. Oil can be a real pain in the butt. Basically, you are going to need a giant oil tank that has to be filled. You put the burden on the tenants, but if they let it get too low as the tenant might do, then air gets into the system and then you have to go and bleed it and it gets to be a whole thing. From my experience, I've done it multitude of times on really ancient systems, and it's a whole thing where you have release some of the oil out of it and it's one more thing as a landlord that you would have to do. So given a choice, I would probably go with gas. Good luck!!!


Joe White

Joe White is a Philadelphia Property Manager and Real Estate Broker. He is the owner of Grow Property Management and has been involved in the management, sales and purchases of Philadelphia area rental investment properties since 2008. He is an author and works as a real estate investment consultant and construction manager.

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