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Should You Upgrade Your Rental Property to Central Air?

Posted by Liran Koren on February 9, 2021
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Are you considering installing a central air conditioning system on your rental property? This isn’t the kind of decision to take lightly. While central air conditioning may offer comfortable temperatures, it’s important to carefully go through both the pros and cons.

What is Central Air Conditioning?

What is Central Air Conditioning

A central air conditioning (central A/C) is a comprehensive system where air is cooled at one location before the cooled air is distributed to the different rooms in the home via ductwork. It is easy to identify homes with central air, as you can usually find vents within ceilings and floors. Central air conditioning became popular in apartment buildings across the U.S. after 1975.

Unlike window air units (window A/C) that cool only the room where they are located, central air conditioners make the entire interior of the home nice and cool. One important part of the central air conditioning unit is its compressor, which has evaporator coils and a condenser, designed to flush warm air out of the house.

Pros of Central Air Conditioning

#1 Comfortable Temperature

1 Comfortable Temperature

Window air conditioning units can cool only one room. Central air conditioning provides your tenants with a consistent and comfortable temperature. Whether they’re in the kitchen, living room, or office, they can enjoy cooled air anywhere inside.

#2 Cleaner Air

2 Cleaner Air

Central air conditioning systems also provide cleaner air. This is because the system contains filters that get rid of dust, dirt and other allergens that you would otherwise inhale throughout the day. As a result, your tenants won’t have to complain about foul smells and stuffiness.

#3 Programmable Thermostat

3 Programmable Thermostat

By installing a programmable thermostat, you can lower energy costs, saving up to 1% on your monthly energy bill for each degree that you set it lower. A programmable thermostat allows your tenants to conveniently set the central A/C to get cool or heat the property at certain times. For instance, your tenants can program the thermostat to power off when they go off to work, and turn on thirty minutes before they come home.

#4 Not an Eyesore

4 Not an Eyesore

One of the major disadvantages of window air conditioning units is that they can become an eyesore. They protrude out of walls and ruin the room’s overall visual appeal. Central air conditioners are significantly smaller and usually kept hidden from view. Upgrading to central A/C in your rental home or apartment can drive up your property’s appeal.

#5 More Affordable Upkeep

5 More Affordable Upkeep

Traditional HVAC systems will need repairs throughout their useful life. With central A/C, tenants won’t have to complain whenever their HVAC stops working. You won’t have to schedule emergency repairs to keep your tenants satisfied. Central A/C units are less likely to break down, which means you can save money on repairs. As long as you or your property managers regularly conduct preventive maintenance, you won’t have any problems with the A/C.

Cons of Central Air Conditioning

#1 Increased Energy Consumption

1 Increased Energy Consumption

Although you may save money by installing a central air conditioning unit with a programmable thermostat, the opposite can happen, too. This is especially true if several people are living in the rental property, and one roommate has a habit of turning the thermostat all the way down. Not every tenant may like cooler temperatures. By comparison, a window air conditioner lets you choose which areas to cool and how cool each room should be.

#2 Expensive to Install

2 Expensive to Install

Covering the costs by increasing your rent might not be the best idea. If you decide to upgrade to central air conditioning, your tenants will have to face the consequences of higher rental rates. As a result, some prospective tenants may be deterred, and existing tenants may not want to renew their lease agreements.

Things to Consider Before Upgrading to Central Air

#1 Installation Costs

1 Installation Costs

For property investors with a limited budget, upgrading to central A/C can be a huge burden on their finances. The average cost to install central A/C in the U.S. comes at around $3,000 to $7,000. However, if your investment property is located in an area where tenants expect rentals to have central A/C, installing it can increase your chances of attracting quality renters. Before upgrading to central A/C, you must carefully assess whether or not your finances can handle it.

#2 Location

2 Location

In areas where temperatures rarely reach extreme highs, adding a central air conditioning unit may be seen as an unnecessary add-on. Tenants in these areas aren’t likely to be willing to pay more for something that they don’t need. However, in locations where summers can get swelteringly hot such as Miami, central A/C in your rental unit will be enough to attract many tenants. No one wants to suffer through the summer heat.

#3 Repair Costs

3 Repair Costs

As a landlord, you are responsible for maintaining your rental property’s central air conditioning unit. In many states, ensuring that the air conditioning unit is free from mold and mildew is part of their local housing code. If you’re considering upgrading to central A/C, be sure that you understand local and state laws, and that you have the budget for upkeep.

Justifying Your Rates

Justifying Your Rates

Not everyone is going to be willing to spend extra money on a new central A/C/ unit. However, you can justify increased rental prices on the benefits of installing one.

For instance, you could explain how your tenant can save money on their utility bills, as well as enjoy cleaner and more breathable air. Marketing your rental unit as an energy-efficient home will attract the right market of tenants who are actively seeking greener alternatives.

Conclusion

Before deciding to upgrade your rental property’s A/C to central air conditioning, you must carefully weigh the pros and cons. The property managers at Luxury Property Care have a thorough understanding of rental markets across Florida. With decades of expertise in dozens of locations across the country, we offer valuable evaluations of rental units, helping you make decisions that are the best for your investment.

Get in touch today by calling (561) – 944 2992 or by completing 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.