Your HVAC system is one of those more important components necessary for the successful upkeep of your rental property. Mature or inefficient heating and cooling systems turn off prospective renters or price present ones too far on monthly utility bills. So, the condition of your heating and cooling system helps you establish the right rental cost and maximize your profit.
However, your HVAC also affects renter satisfaction. Units that don’t cool or heat adequately are at best annoying, and, at worst, a danger to the health of your tenants and their pets. Air quality impacts many things. Even having a humidifier during the winter not only protects the structure of your property from naturally wearing and drying (shielding those expensive hardwood flooring), but it also creates a health benefit for your renters that anyone would love during the cold and flu season.
Thus, your HVAC system influences every aspect of your rental property. But before you replace this old furnace or air conditioner, consider whether it is ideal to buy or rent them. Both have pros and cons and making the right choice will depend on your situation and intentions.
Renting an HVAC System
Renting an HVAC system comes with many of the benefits of leasing or renting a vehicle. As a rental, it is a long term commitment with the option to buy later. But there is less flexibility when it comes to what you can do with your system after it’s installed. Consider these aspects of HVAC rental when picking.
- Low Upfront Prices
When renting from an HVAC supplier like Preferred Climate Solutions, you agree to possess the company install the machine in your property at their expense. And monthly payments are dispersed and distributed over the life span of the system, normally between 10 and 15 years. There’s a little upfront cost for you — no more $4K to $5K worth of equipment to buy or contractor to hire. The rental firm oversees the installation.
Because renting is a lower monthly payment than financing, you’ll have the ability to reduce your overall rent a month especially to getting commercial air conditioners for rent. Or you may keep it the same and expand your profit margin. The low start-up cost also frees up cash for other jobs or projects. If you needed a new HVAC and a roof replacement, leasing the heating system and cooling system could find both projects done.
However, there’s just one big financial disadvantage to leasing an HVAC System — you’ll spend much more in rent within the life span of the system than you’d be by buying it outright. By way of example, a furnace that runs $4,000 to $5,000 range may cost you approximately $18,000 within its life.
- Free Maintenance
Together with HVAC rentals, you won’t have to worry about the prices for future repairs, maintenance, and replacements. Rental companies provided free or discounted labor and repair costs. After the firm has deemed the machine to have reached the end of its “life,” it’ll replace it — that is if you opt to renew the contract.
Thus, the trade-off is in liberty choice. The rental firm decides when a system has reached its “useful life.” Also, it selects who keeps the device. Thus, if you’re unsatisfied with the current service, there’s little recourse. For repairs and inspections of the equipment, the company gets access to your rental property anytime they want, which may turn some tenants off to the thought. However, free care is also convenient for tenants who live long distances from their property or who have little time to handle such matters.
- Rental Contracts are Transferable
Should you sell the property, you can transfer the rental agreement to the buyers/investors on the same terms. Based on your target buyer, this might be a bonus or even a deterrent. For example, retirees may prefer the ease-of-use a rental contract attracts. If this is so, buyers may then presume your rental payments. When they don’t you’ll have to keep paying the HVAC rental fees every month or cover the one-time-buyout cost for the equipment.
Some HVAC support lessors make it possible for tenants to take over your monthly rental payments. That means that you can roll the cost into your monthly property rental charges. But it’s ideal to make the HVAC leasing payments yourself. Late payment charges can be exorbitant and chemical monthly. You do not want your tenants’ lapse in payment, costing you on late fees.
Buying an HVAC System
Purchasing an HVAC system is also a good solution for property owners who can afford it. But funding a system is much like buying one. It’ll cost you in the long run in interest rates. If you pay more in interest or rental premiums will depend on your interest rate, the length of the contract, along with other aspects. And you also should consult a tax professional to see whether you’re able to deduct interest paid or lease fees from your annual income taxation. The answer may be a bonus to pick one over the other. Below are some pros and cons of purchasing an HVAC system.
- Long-Term Savings
The obvious advantage of a one-time payment would be the long-term savings you get from no curiosity and rental fees. But that first outlay of funds has an opportunity price. You won’t have the funds for other developments or for lowering your rent. These place you at a disadvantage in the competitive market for renters. However, a one-time buy includes risks also. If you set up a new system simply to sell the property a year or two later, you are going to be walking away from a portion of your investment. And if you finance, you are going to be paying interest each month without the advantages of free maintenance and upgrades that come with rental arrangements. Many companies provide warranties and security plans for labor and parts, but that is an added cost.
- Makes Selling Easier
Because there are no contract transfers like rentals, selling your property is easier. Your marketplace for prospective buyers opens upward. House hunters won’t yell at a monthly rental agreement they’ll need to assume. If this is true, you ought to bring the cost of buying out the HVAC equipment to the selling price of your property. This increases the asking price. So, HVAC rentals can be a negative selling point.
- More Maintenance and Service Flexibility
When the HVAC equipment is yours, you get to choose who services it and that doesn’t. Having a rental agreement, there’s little you can do. Freedom to select helps you locate local heating and air companies that may be less costly and more convenient to work with. If you have friends or family who are HVAC certified technicians, or you own a heating and air business yourself, then free maintenance isn’t much of a selling point for renting. Additionally, rental companies have the contractual capacity to put in your house to inspect, service, and replace equipment. If the equipment is yours, then you don’t have to agree to this.
Whether you buy or rent an HVAC system depends on that which you prioritize — money or time. If you’d like a hassle-free encounter that costs more in the long run, then leasing may be the solution. But if you’ve got the money and don’t mind dealing with scheduling, upkeep, and maintenance, then buying outright makes more sense. Either way, you need good heating, ventilation, and air conditioning unit to keep a healthy tenant-landlord relationship. Without it, you won’t have money coming in to pay for an HVAC at all.
Preferred Climate Solutions is owned and operated by HVAC veterans. We have over 17 years experience with portable heating and cooling systems, plus a lifetime of experience with Texas’ challenging climate. We provide an array of portable cooling and heating rental solutions 24/7. We have locations in Houston, Dallas/Ft Worth & Austin Texas.