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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?
propane is 3 times the cost of natural gas in my neck of the woods in upper township, NJ it would affect my decision on price. I myself would not buy a house that uses propane for heat. you are looking at 3 times the cost for heating say $600 a month for propane versus $200 for natural gas.
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?
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?
How long is your break even for your geothermal system? I've seen some quotes for $70-100k to have geo installed.
How long is your break even for your geothermal system? I've seen some quotes for $70-100k to have geo installed.
Good Question, I do not however have an answer to that question. When I purchased the house, it already had Geothermal installed. So I have no baseline to compare heating costs to. If I had propane and was paying $800 a month in the winter, I could say I'm saving X amount of dollars a month, but I don't have that sort of comparison.
As for 70k to 100k quotes, that sounds awfully high. There are several different forms of geothermal, and costs for each of them. The cheapest to install is an open loop geothermal system, (What I have) where you pull the water from a well and have a return well (or dump the water on the ground) I'd say your looking at 20 to 30k for such a system. The most expensive would be a DX system with vertical wells (where you don't have sufficent space to dig a long wide trench to do a close loop system).
I had assumed geothermal would be too expensive to install, but I can look at that again. I have considered adding a hybrid heat pump so that you would only need propane when it goes below 35 degrees outside, as well as solar panels to help offset the cost of the electric pump...
Why would you think the home value would be affected by having propane?
It is propane now, and priced as a house heated propane.
When it comes time to sell, the value will again be priced by the market as a house with propane.
I see only 2 reasons why propane would cause a market value reduction,
1.) if the house was priced and sold with nat gas and converted to propane for some reason
2.) or if the cost of propane skyrockets for some reason compared to nat gas. between buying and selling the house.
Why would you think the home value would be affected by having propane?
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.
TechGromit, do you have thoughts on whether propane turns buyers off as much as oil? Are people concerned with the safety of underground propane tanks?
We are certainly hoping that gas would be added to the street while we live there. But we have to assume it will not - I have looked into it and there are numerous hurdles. Just want to make sure we'll get back our investment when we sell the house, assuming the market doesn't take a dive. How do we know we aren't paying too much now? Comps are telling me the house is priced well below similar homes that do have natural gas. But what is the right amount to mark it down? 20,000 - 50,000 - even 100,000?? (home prices are $700,000-900,000 range)
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