Tankless water heating makes multifamily housing more manageable for property owners
October 5, 2016
Leasing multifamily homes or apartment buildings can be an excellent source of income. Operating expenses, however, might make leasing property a lot less lucrative for building owners.
According to a 2015 National Apartment Association survey, the average property owner paid a whopping $5,411 per unit in salaries for managers, utilities, maintenance, etc. Do those costs sound familiar to you? Are you tired of investing time and money on your property without a sizeable return? Tankless hot water systems can help reduce operational overhead and save property owners money in the long run.
Address hot water issues in multifamily distribution
Conventional hot water systems in a single family home add considerably to monthly energy bills because of standby heat loss, so it stands to reason that the effect on multifamily homes is a matter of multiplication.
However true, it’s even more complicated than that. Imagine you own a three-story building with one tenant on each floor and three separate tanked systems, one for each apartment. While the first-floor tenant has no issue getting hot water, the tenant on second floor may not be as lucky. Why? Because of the difference in space between the taps in each apartment and their respective hot water heaters.
“Unhappy tenants can create a lot of apartment turnover.”
Now picture what it’s like on the third floor: Hot water takes forever to reach the faucets. Energy bills are high because of standby heat loss in all the extra piping between the basement and the third floor. Unhappy tenants can create a lot of apartment turnover, and that means additional marketing costs to advertise the space and perhaps even income loss from an unexpected period of vacancy. Switching to a point-of-use tankless system resolves this issue entirely. No matter where tenants live, they always have access to hot water when they need it and they never overpay for hot water because of an outdated distribution system.
Discover value-add opportunities in basement storage
Many apartments offer long-term storage in their basements, spaces typically shared by hot water tanks. This poses two big problems for property owners: First, the sheer size and number of hot water tanks in an multifamily setting limits the amount of space landlords can offer tenants. No storage could be a deal breaker for potential renters looking for apartments in tightly packed urban areas where square footage is hard to come by.
Second, landlords may be liable for damages to their tenants’ personal property should a hot water tank spring a leak. How often does that happen? Consider one study from MEA Forensic that found out of 700 incidents of hot water loss at residential properties, more than 480 were caused by leaking or ruptured hot water tanks.
“Property owners can expand storage into areas once dedicated to water heater tanks.”
Again, property owners can avoid this problem by going tankless. Not only will they prevent damage to tenant property, but they can expand storage into areas once dedicated to tanks and make their apartments more attractive to renters.
Take the mystery out of managing multiple water heater tanks
One hot water tank is difficult enough to maintain, but three? Five? 10? With so many different systems to maintain, is it possible property owners could spend far too much on upkeep costs? We certainly think so.
Residential-grade tanked water heater systems only have a life cycle of about a decade, whereas tankless systems can last 20 years and beyond. With multiple tanks under a property manager’s purview with varied histories, each one is like a time bomb. Who knows when one will fail? And when one inevitably does, property owners will pay top dollar for emergency repairs, not to mention possible replacement costs.
Alternatively, tankless water heaters hardly ever need maintenance, far less than what tank heaters require. Moreover, after a tankless system has served its two decades or more of operation, replacing the unit is much simpler and less labor-intensive than it would be for traditional hot water tanks, thereby minimizing maintenance costs.
Lease property exactly the way you want to
Take a second and think about the agreement a property owners makes with his or her tenants. Renters either pay for their water heating costs, or landlords foot the bill to make their apartments stand out among real estate postings. Which camp do you fall into? Would you rather the opposite be true?
Adding tankless systems throughout apartments at different points of use – sinks, bathtubs, washing machines, etc. – shows you’re willing to invest in cost-effective housing for your tenants. If hot water costs are already the renter’s responsibility, tankless will help you differentiate your property from others in the area.
If you currently pay for hot water costs but want to pass the expense to renters without burdening them, remember: tankless systems have a 99 percent thermal energy efficiency rating.
Tankless systems can also help lower operating expenses for property owners that take care of hot water utilities for their tenants. So, whether landlords have always covered the costs of hot water for their tenants or they plan on assuming this utility, they won’t break the bank.
Simplify property ownership, management and maintenance by going tankless. Renters won’t be the only ones who notice a difference. You will too as your operating expenses decrease and your property value goes up.