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When we bought our house in 1991 it had oil heat and propane for cooking, hot water, and clothes dryer. Neighbor next door had electric heat. He called the gas company and asked to convert. The gas company called us and asked if we would like to convert as well. We converted to get rid of the propane around 1994, then did the heat around 1998. As I recall, they did not charge us to run the line down, and they did have to run a line from the street (about 500ft) as we are on a flag lot.
If there is gas in the area, you might want to call the gas company and see how much they charge to run a line. You would have to purchase new HVAC and appliances, but that could be worth it.
Would love to get reactions to purchasing a house on propane right now. Assume house is amazing and being sold at a great price, but there is no chance of ever being able to convert to natural gas on that street. (all other streets nearby DO offer natural gas)
House is very large and expensive to heat. But the tank is at least owned by the homeowner so one can shop around for rates. Buyer might have to resell the home within 3 years, in a worst case scenario.
How much could this hurt resale value (is there a way to estimate % loss of value for propane?) or affect the time it takes to sell the home due to a smaller pool of buyers willing to consider propane?
i don't know how expensive propane would be over a long period of time, but there's other conversion options. does the house have central air? if not, ductless units are both heating and cooling and run on electricity. install solar panels on your roof (if the house is suitable for it) and you have a very nice alternative to propane.
A large size house would be worth it to convert the HVAC system over to Geothermal. A smaller house maybe not. Personally I have a 3300 sq ft home that uses Geothermal for the downstairs and ASHP for the upstairs, The highest electirc bill I ever had was $480, I average $250 a month year round. If propane is too expensive for you, there are alternatives. If the house is poorly insulated, upgrading the insulation is going to give the biggest bang for your buck. Can you put in a wood or coal stove to help with the heating bills?
this post is even better than what i suggested. point is, there are options.
You will have to admit that the method of heating turns some buyers off and limits your market. Less buyers equal a harder time selling and a lower price you can ask. You mention the word Oil heat (with buried underground oil tanks) and that pretty much cuts your buyer pool in half or more. The liablity of leaking oil tanks along with the ever increasing price of heating oil is a real negative to a lot of buyers.
If the same house was converted to natural gas in the future (if the gas company adds gas lines to his street) the house would be appealling to more home buyers, far easier to sell and most likely would get a higher selling price.
but what he is saying is that if the OP is purchasing a home that uses propane, the OP is buying the home for the "reduced" propane price. so no reason to expect the price to be further reduced when he sells it. the logic seems solid to me but there are other variables that could come into play when it does come time for OP to sell the home later down the road.
i did a little reading on geothermal and it seemed like it doesnt really work out to a financial positive in nj with our climate. i believe the numbers work out better in a hotter climate.
Last edited by CaptainNJ; 04-17-2014 at 08:54 AM..
i did a little reading on geothermal and it seemed like it does really work out to a financial positive in nj with our climate. i believe the numbers work out better in a hotter climate.
I have a colleague that has geo and it's cheaper in NJ and than upstate NY because the ground is softer in most parts of NJ to dig.
In general the savings are great but due to this *past* winter you heating bills will still go up because it does not provide enough heating to overcome the frigid temps that we endured. You still need a backup system in place preferably a central AC system to supplement your geo system.
OP, to me the biggest risk is reducing the pool of potential buyers down the road. When we purchased our first home, we got a great bit of advice from our realtor. We looked at a great house, perfect in every way for us and the price was great. However, from the backyard you could see high tension power lines. The house wasn't next to the power lines, but they were visible. I don't think it would have bothered me too much. But our agent warned us to be careful with our choice. He said, "You might not care about those power lines, but the next guy might. Before you invest, always keep future resale in mind." Whenever I see homes sitting on the market for months and months because of their location (power lines, on a main road with traffic, next to a gas station, etc) I always remember his advice.
For me personally, I would never look at a house that had propane, oil heat or even an unused oil tank in the ground. It would never enter my consideration, regardless of how nice the house might be. I have known too many people who have run into issues with propane or oil. It's not something I'd take on.
OP, to me the biggest risk is reducing the pool of potential buyers down the road. When we purchased our first home, we got a great bit of advice from our realtor. We looked at a great house, perfect in every way for us and the price was great. However, from the backyard you could see high tension power lines. The house wasn't next to the power lines, but they were visible. I don't think it would have bothered me too much. But our agent warned us to be careful with our choice. He said, "You might not care about those power lines, but the next guy might. Before you invest, always keep future resale in mind." Whenever I see homes sitting on the market for months and months because of their location (power lines, on a main road with traffic, next to a gas station, etc) I always remember his advice.
For me personally, I would never look at a house that had propane, oil heat or even an unused oil tank in the ground. It would never enter my consideration, regardless of how nice the house might be. I have known too many people who have run into issues with propane or oil. It's not something I'd take on.
that's definitely something to consider, but is less of a consideration if you don't see a reason why you'd be in a rush to sell. So, if i was putting a small down payment and was looking at a risk of not having a lot of equity in my home for a while, I would be more hesitant for those little things that reduce the pool of potential buyers and, as a result, may increase the time needed to sell a property. But if i was putting 20% down, had stable jobs, etc., I'd be less concerned.
Thanks for the helpful comments. I don't think we will be in a rush to sell when time comes, but it is possible we will only stay in the home 3 years, pending job opportunities down the road.
JustMeEC - can you elaborate on the issues that you know people have run into with propane? I was only considering the undesirable financial aspect since it is so expensive. What are the other concerns?
if i was planning on staying in a house only 3 years, id probably rent.
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