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Are Tankless Water Heaters Right for Your Rental Property?

Posted by Liran Koren on February 12, 2021
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One of the things that tenants consider when deciding whether or not to rent a property is the water heating system. No tenant wishes to take a freezing shower in the morning just because their neighbor used up all of the hot water.

If you’re thinking of upgrading to a tankless water heating system, below are several things to consider.

What is a Tankless Water Heater?

A tankless water heater is known as an “on-demand” or instantaneous water heater. Unlike traditional storage tank water heaters that continually maintain gallons of heated water, tankless water heaters contain heating coils that heat water on demand.

How Does a Tankless Water Heater Work?

How Does a Tankless Water Heater Work

First, cold water makes its way into the water heater when the tap is turned on. How water is heated depends on the type of tankless water heater that you have. Cold water travels through a pipe and is then heated with a gas burner for gas-fired units, or an electric element for electric water heaters.

The main difference between a tankless water heater and a storage tank water heater is that you may have to wait a few seconds before hot water reaches the faucet, showerhead, etc. This, however, can also be considered an advantage since you can eliminate the cost of constantly keeping stored water warm.

What’s the Difference Between Gas and Electric Tankless Water Heaters?

What s the Difference Between Gas and Electric Tankless Water Heaters

More homeowners and property owners prefer an electric tankless water heater. The main reason is that tankless water heaters are easier to install. In addition, you don’t have to worry about explosive gas, which can be a serious hazard that can make you liable for untoward incidents.

If you decide to install an electric tankless water heater, you will need to consider the power supply grid. Heavy-duty electric heaters run on 240 V, while small tankless water heaters draw 110 V. if your rental property is an older home, you may need to upgrade its power supply to handle higher amperage.

On the other hand, gas tankless water heaters will require accessibility to natural gas or propane. Not every property offers access to gas.

What are the Benefits of Buying a Tankless Water Heater?

#1 Capacity

1 Capacity

Typical storage tank water heaters can store approximately 60 gallons of heated water. Though water heaters are expensive due to the heavy energy required to constantly generate hot water, storage tank water heaters are more convenient. Your tenants don’t have to wait for water to reach a certain temperature before they can take a bath. The downside to tanked water heaters is that they take up huge amounts of space.

On the other hand, tankless water heaters are significantly more compact. In addition, they are 22% more energy-efficient because they heat water only when it is needed. This makes the capacity of tankless water heaters unlimited!

#2 Cost

2 Cost

Tankless water heaters will cost $1,500 with solar-powered systems costing anything between $2,000 to $6,000.

The high price tag of tankless water heaters may seem shocking, but it’s a good idea to consider its energy-saving benefits before ignoring such an upgrade. Tankless water heaters are an eco-friendly alternative to traditional water tanks. In some states, properties that use “green” appliances can qualify for certain incentives.

#3 Lifespan

3 Lifespan

Storage tank water heaters last around 12 years, but only when they receive proper maintenance. They’re also prone to more damage, and are known for flooding homes and basements.

Tankless water heaters, on the other hand, can last more than 20 years if regularly maintained. As long as you or your property managers schedule tankless water heater maintenance at least once a year, your tenants can enjoy having an unlimited stream of warm water for years.

#4 Size

4 Size

One of the clear benefits of tankless water heaters is that they take up less space. Tankless water heaters can be mounted on walls since they don’t have a bulky storage tank. This gives your tenants more livable space — plus, tankless water heaters are not an eyesore.

The downside to this is that tankless water heaters can generate limited amounts of heated water at a time. Your tenants may find it difficult to run a warm bath and run a load of laundry at the same time.

When Should You Upgrade to a Tankless Water Heater?

#1 Your tenants complain about running out of hot water

1 Your tenants complain about running out of hot water

Tankless water heaters heat water as needed. They don’t store gallons of pre-warmed water that have to be refilled after running out. With a tankless water heater, your tenants can enjoy as much hot water as they want, whenever they need it. In other words, your tenants will never run out of hot water again. Offering such a convenience to your tenants is one way to keep tenants happy.

#2 You want to offer more space in your rental property

The more space your rental property has, the more valuable it is in the eyes of prospective tenants. Tankless water heaters don’t have tanks, which means your rental property will have more space that tenants can utilize. Additionally, tankless water heaters go with any type of home thanks to their simple and compact design.

#3 Prospective tenants are discouraged by the expected monthly energy bills

3 Prospective tenants are discouraged by the expected monthly energy bills

Tenants will want to save as much money as possible. Prospective tenants might not find the appeal in older rental properties that run on traditional storage tank water heaters. Tankless water heaters do not have to heat water non-stop to maintain a reserve of water. That means that tankless water heaters don’t have to consume energy constantly. By installing a tankless water heater, your tenants can expect lower energy bills month after month. As a result, you increase your chances of filling vacancies fast.

Should You Upgrade to a Tankless Water Heater?

The choice to upgrade to a tankless water heater ultimately depends on the needs of your tenants and on whether or not your rental property is ready to accommodate a tankless water heater system.

Weighing the pros and cons of major improvements to your rental property can be difficult, but at Luxury Property Care, we can offer our years of expertise to help you make a sound decision. Our property managers will assess each rental unit and offer suggestions that are tailored to your situation.

Call us today at (561) – 944 2992 or fill out the contact form.

I'm Liran Koren. It’s still hard for me to call myself a real estate pro. Also, I'm a co-founder of Luxury Property Care. I believe that through common work we can create a healthy ecosystem, that serves investors, landlords and even tenants altogether.