Hello Valued Readers!
Today we are going to discuss the pros and cons of gas appliances versus electric ones. There are a number of factors to consider including price, safety and attracting good tenants.
But first…does this matter to you?
If you own any single-family home properties then it is crucial to understand the differences between these two energy sources.
If you only own condominium properties then this article won’t be immediately useful to you but you may have to make this decision regarding your own home or you may purchase a single-family home in the future.
So lets start with the main kinds of appliances that come in both gas and electric forms:
- Water Heater
Furnaces are also on the list but since we are in South Florida we left them out. Each appliances is a little different in terms of consumer preference and demand so we will detail them in the sections below.
The Almighty Dollar!
So lets start with whether or not a gas appliance will save you money as a real estate investor. The easy answer is no it will not, but like most things it’s not that simple. One of the main reasons homeowners switch to gas appliances is to save money on their monthly utility bills. Averages put savings on each gas appliance compared to electric at $79 for a stove, $81 for a dryer and $297 for a water heater. This doesn’t seem like a lot but $500 a year is nothing to scoff at. However, the average cost of most gas appliances is higher than that of their electric counterparts by anywhere from a couple hundred dollars to several hundred dollars. But the government wants people to switch to more energy efficient appliances so they offer rebates on each of the appliances that can offset the cost. Take a look at this link to Florida City Gas that details the rebates.
So the main issue in terms of cost in a rental property has to do with who pays the bills. The vast majority of rental properties have the tenant paying everything except the water bill and in some cases the tenants will even pay the water bill. That is a topic for a future post but for now you can see why it may not make sense to buy gas appliances because as a landlord you are not receiving the benefit since you are not paying the bills.
So as a straight cost proposal converting to gas appliances does not make cents. Bad pun intended. But…
The Power of Extras!
When you are a landlord you are selling a product. The product is the property and all of its bells and whistles. Depending on the level of tenant you are trying to entice you will want to put more or less incentives. But generally speaking offering more little extras will pay off in a big way with better quality tenants who will take pride in caring for your property. One of the extras is being able to tell them that they are going to have lower energy bills as a result of having gas appliances. Also because gas will be less expensive you may even be willing to cover the cost of the gas appliances which will further entice a quality tenant and give you more juice when it comes to raise the rent to keep up with the market. There is one other major draw of gas…
Food is The Way to a Tenant’s Heart!
The most commonly installed gas appliance is a gas stove because unlike with other gas appliances a gas stove is actually better than an electric stove. With a gas stove you can see your temperature exactly and so home chefs overwhelmingly prefer gas stoves. With a single-family home you will mostly have families and therefore there will be a lot of cooking going on the home. If you are thinking about getting a gas appliance and want to get the most bank for your buck definitely go with a gas stove.
The Negative: Fear
Many people still have a fear of gas inside a home. And this is a justified fear, a gas leak can literally kill you in your sleep. However, carbon monoxide detectors sell for about $20 and will loudly notify occupants of elevated levels of gas in the air. In fact carbon monoxide detectors should be standard in all of your properties as extra protection just as fire alarms are. Of course you would never want an open flame from a gas water heater to be located inside a property because the flame never goes out. But in the gas of a gas stove they should be considered just as safe as their electric cousins.
So those are the pros and the cons, the bottom line is that if you have a mid to high end property your tenants will probably be very motivated by a gas stove and by saving money on their utility bills. If it is a lower end property it is probably best to just keep it simple and electric.
We hope you enjoyed this week’s article, as always please feel free to contact us with any questions about your rental properties. We also offer a complimentary in property analysis to help you determine how you can maximize your cash flow and tenant retention.
Thanks for reading!
– Real Property Management Miami
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