Air conditioner? or not?

Hello all,

I am currenlty building a property near the ACT and I am trying to decide whether I should get the gas heating system currently standard in my building inclusions list replacted with a reverse cycled ducted air conditioning unit (few thousand extra)

People keep telling me that I wont be living in it and I shouldnt bother with an air conditioner but I cannot personally comprehend how someone can live without some form of air conditioning in light of Australian summers?

Basically I want to know whether getting ducted air conditioner is recommended? Is air conditioning one of the more common demands made my tenants? or criteria for prospective tenants? do they care if its ducted? split? or other?

Also should I go ducted or simply spend a grand on a split air system? These units dont cool or heat anywhere close to a ducted system but should I care? I am not living there? I know this sounds a bit crude but I dont want this to be a personal decision i.e. i wouldnt live there if there was no air conditioning.. I want to make the right decision putting "what I would do or rent" to one side...




Thanks in advance,
Timothy Cocaro

Dear Tim,

I haven't installed airconditioning into any of my IP's yet. Comes down to I will only install something that is going to give me a greater return on my $$$. If my tenants are not going to pay sufficiently more............ IP's are not emotional and must be soundly based on dollars and cents.

Something that may be useful in your analysis is a comparision of the different heating systems in the marketplace and their corresponding efficiency.


Fuel; Appliance Efficiency; Cost of Useful
Heat cents/mj

Natural Gas 75% 0.9
Firewood
Airtight 60% 0.78
non-airtight 35% 1.25
open fire 15% 3.13
Electricity
storage space heater 90% 1.06
reverse cycle airconditioning 200% 1.22
portable heater 100% 2.46
LPG 75% 1.72
Kerosene 85% 1.9
Heating Oil 72% 2.05


Cheers,

Sunstone.

Sunstone,

that was interesting. do those figures indicate that R/C A/C is the most efficient? maybe i dont follow.

the reason for the question is that i am considering putting an A/C into an IP as I am in Adelaide and I find this is a USP for later valuation (plus it is needed to keep tenants).

jocko

Some years ago I spent some time as an agent renting out numerous properties.

In the summer months (Melbourne), the FIRST question asked was the availability of AC. In the winter months, no one thought about it but they all rang up in summer asking for it from the owners.

We managed to get extra rent ($5-10pw) by negotiating this for the tenant/landlord. I guess it is all in how you approach it.

I do not renovate a single property without putting in AC. The type depends on the size and layout of the property. I have used both RC and ducted.

Cheerio

PS. As long as the master bedroom has something, everyone is usually happy as there is NOTHING worse than trying to sleep in a hot room.

Dear Jocko,

You followed right. Based on appliance efficiency R/C A/C is the most efficient and is amongst the cheapest on the cost of useful heat.

From an airconditioning (cooling) point of view all my present information tells myself that it is the most efficient as well.

If you want to see from the source this table is in:

http://www.somersoft.com/forums/showthread.php?postid=35541#post35541

Another point with this airconditioner is for a brick IP you don't need to cut a hole in the wall. I have seen some ugly airconditioners. If you wanted to get rid of a non R/C A/C that has broken down you can't simply remove it without fixing this big hole. The R/C A/C removes this problem.

Anyway run your figures. Make sure that your expenditure is going to bring in more dollars.

Cheers,

Sunstone.

Timothy,

Near the ACT, I trust the MWWI rating.

That stands for the "Mrs Whitfield's Whinge Index".

Every day there's a complaint about the heat, the rating goes up by one.

On this rating, Sydney was perhaps 60 to 100.

Canberra might have hit ten.

I'd be more concerned about heating- Canberra region gets bl**dy cold.

Radiant ceiling heating is what we use in our house- but that's for people like us who don't really need toaster temperatures.

Why are people so concerned about Enery ratings?

Thanks people...

quick follow up question... why are people concerned about the enery ratings? e.g. This is a cost born by the tenant correct? so why should it concern me? Maybe slightly i.e. the less money the tenant spends the more he/she has for rent but thats about it..

The areas I am buying has a high proportion of professionals so I think I will go for air con as I beleive it will be a significant factor in people wanting to rent...

One last question my builder has a ducted gas heating unit included in the selection list;

a) remove the gas heating and replace with r/c a/c?

b) keep the gas heating and have a "only colling ducted system?" or something like that?

what do you guys suggest...

Also I know that ducted gas heating will heat a lot better than r/c a/c since hot air rises and I am guessing the heat ducts will be floor based on a specific heating system? So should I keep the gas heating and install a cheap split system cooling system?
arghhh.... so many choices..


Thanks in advance,
Timothy Cocaro

Hi Tim,

My parents had a ducted evaporative AC installed in their house a few years ago. It helps a great deal when you get hot days like we do here in Perth. Sometimes, we also get hot and humid days (nothing like Sydney's humidity though) and system then makes you feel like you are sweating...not very pleasant at all.

I have a box AC in one of the flats...it is reverse cycle and works very well, bought it second hand and had someone install it for me, cost $600 5 years ago....does the job summer and winter!

Glenn

Canberra Experience

Hi tcocaro,

Having lived and bought in Canberra, I can offer the following observations:

Hot and dry summers (40 degrees at times), but sometimes with an overnight change
Cold foggy winters (-7 overnight at times), sometimes the fog doesnt lift until 1pm

We found we needed good heating and good cooling

Our first house we rented from DHA had the in-cailing heating and that was pretty good. It couldnt be tampered with by the tenants (us) and had thermostat controls so you could turn off rooms that didnt need heating. We had to rely on portable fans during summer though but that wasnt too bad. The most important there was heating in winter. I believe the in-ceiling heating is expensive though.

In our house (PPOR), we had a gas wall furnace. The house was 4 bed but only 16 squares and that coped very well with the winters. Relied on fans again in the summer but there was usually a breeze and it cooled down at night.

Evaporative cooling is not that good in Canberra as it is still too humid (unlike SA where the air is very dry), so R/C A/C would be recommended over Evap.

The ducted systems are very popular in CBR and there are plenty of suppliers who can provide and maintain them.

Overall though, my best suggestion is very good wall and ceiling insulation and also window pelmets and seals around doors and windows. That will increase the ERR (which, btw, is the responsibility of the vendor to provide as part of the sale. mandatory ACT gov't requirement - usually $135)

By having good insulation, and as you are building you can stipulate this, you can save on the heating/cooling system to be installed. And for the ACT, this becomes a unique selling point to increase the value and therefore the return on your property.

Sorry for the long message everyone.

jocko

We find that split system airconditioners in family / living rooms add $5 - $10 per week in rent.
They cost about $2,000 installed and you can depreciate the cost.
They differentiate your property from others on the market and if you look at your return on money spent its pretty good. At least 12% and probably more

A question for Dale

They cost about $2,000 installed and you can depreciate the cost.

Click to expand...

There were some matters recently about what could be depreciated as plant, and what could be depreciated as fittings, as a result of a recent court case.

Is air conditioning plant (2.5%) or fittings?

And what about items which were depreciated some years ago under the schedulte avialable at the time, including things thought to be fittings at the time, which ATO have presumably decided not to treat as plant. Will we have to go back some years and lose depreciation for x tears ago?

I would presume that any "plant" items which had to be disposed would be able to be written off in full when disposed of.

Hi there.

I think that installing an a/c would also depend on the town/city and the potential tenants you are after. If your area has alot of shift workers, then an a/c in the main bedroom is a must.

I'd go with air conditioning. It won't cost a lot to put R/C air condition in at this point, and it's something that adds a lot of value in a tenant's mind.

No, you're not going to live there - but you want happy tenants & you want them to choose your property over someone else's. Given the choice of 2 properties equal in both respects, but one with air-con and 1 without... which would YOU choose? With Canberra's summer, I don't understand how anyone could live without it either.

tcocaro

Just on your q about Reverse Cycle A/C’ing.

We had on in Dubbo (Very hot dry heat) worked exceptionally well in summer but winter it kept freezing over (Dubbo doesn’t get bad winters like ACT).
So I asked the A/C guys about this and they said that most A/C units freeze over below –1 except for a few on the market.

So what I’m saying is if you go down the RS A/C road make sure it will operate @ minus 10! I believe Dakin’s one does.

Mine was a panasonic.

Regards

Ed.

P.s we don’t have A/C in our place in the ACT but do have good ducted gas, and no complaints to date yet.