Is A Tankless Water Heater A Good Investment For Your Rental Home?

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Is A Tankless Water Heater A Good Investment For Your Rental Home?

 

As a Landlord, you know that someday you will get the dreaded call that the water heater has come to the end of its days. That means it is decision time! Do you go back with the old faithful holding tank or change things up and go tankless?

Looking online you will find a variety of opinions on which one you should choose. In this blog, we are going to go over why Nest Finders doesn’t recommend you go tankless!

First, let’s look at what we are comparing. On one hand, you have your standard 30-60 gallon storage tank. The size you need depends on the volume of water your household uses. They tend to be close to 5 feet tall and 2 feet in diameter. They are bulky, but most homes were built to accommodate them.

 

On the other hand, you have tankless or on-demand water heaters. They are compact, averaging less than 2 feet by 2 feet and mount to the wall inside or outside the home. They will require some retrofitting to the plumbing to be installed where a tank once stood. Tankless water heaters, like the storage version, come in both Electric and Gas options. 

 

When compared by the experts at Consumer Reports the gas and electric versions of tankless water heaters performed similarly. They also found very consistent performance by brand. One thing to note about the two is the lower cost of use with the gas models. This lower cost is simply due to the lower cost of gas compared to electric rates.

 

Efficiency is great, but there is something to be said for the old standby of a storage tank. The tankless water heater will give you unlimited, but not always immediate hot water. They have a minimum flow rate to activate and start heating water. They also will have you considering if you can shower with the dishwasher going at the same time.

 

One other thing to consider about a tankless water heater is maintenance. You must flush them regularly to keep them in good working order especially if you have hard water. If you are not living personally in the residence you can never be sure that all of the prescribed maintenance is getting done regularly.

 

According to Consumer Reports, “If you have hard water, like many regions of the country, periodic flushing of the heat exchanger to remove hard-water deposits is necessary. It’s also important to clean out the sediment filter on the heater from time to time. If you hire a plumber to do this, it can cost $300 or more.”

 

When it is time to replace your storage water tank you can expect to pay around $1000 for the tank and labor to install it. If you are looking to change from a tank to an on-demand system you will pay two to three times that amount.

 

While a gas tankless water heater may be more efficient and save you close to $100 per year, the upfront costs will likely NOT be paid off in the warranty time frame. If you are not in the home and reaping the benefits of that monthly cost savings, you will be stuck with the entire bill. 

 

Nest Finders owner Blakely Hughes, does not recommend tankless water heaters on rentals because of the "large initial cost and expensive cost of repairs."

 

Whether you go with a new storage tank or change your system to tankless you will incur some initial cost. If you are not living in the space you will not be the one who benefits from it. All in all, it is a personal choice, but as you have seen here, we do not recommend changing your plumbing to tankless. 
If you are interested in finding out more about how Nest Finders can help you with your rental property and what recommendations they have for you CLICK HERE for your Free Rental Analysis.

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