“It’s a sure sign of summer if the chair gets up when you do.”
-Walter Winchell

OWNERS NEWSLETTER – JULY 2019

R-22 PHASE OUT – This is really important! If your rental property has a central air system that was installed prior to October 2015, the system operates with R-22 refrigerant, which is also referred to as freon. Since October 2015, the cost of R-22 refrigerant has increased noticeably. However, as of January 1, 2020 (in six months), it will be illegal to import or to manufacture R-22 in the United States. Consequently, the cost of R-22 is going to skyrocket.

PLAN AHEAD – If you own one or more of the older central air systems, now is the time to begin planning (and saving up) for its eventual replacement, especially if you’ve already experienced previous or recurring repairs. Yes, there are some new synthetic refrigerants that can be used in the older systems, but the alternative refrigerants decrease the effectiveness of the system considerably and will not cool as well. The alternatives also have considerably more oil in them than R-22, which will “gunk up” the older systems. Using these alternative refrigerants will likely hasten the demise of your property’s central air system.

COSTS – Up until now, we have been able to keep the cost of R-22 Refrigerant at $50 per pound. Unless a repair is strictly an electrical issue, charging the system with some amount of R-22 is a near certainty. In some areas, contractors are now charging $120 per pound or more. As supplies of R-22 dwindle, the cost of charging an older system will no longer be cost effective. Several area HVAC (heating, ventilation, & air conditioning) contractors have already informed us that they will no longer carry R-22 refrigerant as of January, 2020. Presently, the average cost of replacing an entire system (outside condensing unit & inside evaporator unit) is about $4,500.

CONVERSIONS – Some HVAC contractors will offer to perform “conversions”, that is, switching out the system’s coil, condenser and line set, but most are recommending a full system replacement because the cost difference is only a few hundred dollars. If you have to spend that kind of money, you’ll want to go with a new system, which comes with a manufacturer’s five-year warranty and is extended to a ten-year warranty when the new system is registered by the owner or installer. Don’t forget, owning a rental property allows you to deduct expenses associated with repairing your investment such as replacing a central air system.

FINAL THOUGHTS – Most HVAC system failures occur in the summer months, when the central air system is under the most stress. The ideal time to replace an older system is in the cooler months, not during periods of extreme heat when your renters need their A/C the most. Scheduling the replacement of a full system takes time. Demand for full replacements will surely increase once R-22 becomes illegal, making wait times even longer. You definitely don’t want to risk losing your renters coupled with the cost of replacing your central air system.

David Gerke
Broker

Posted by: juliem on July 2, 2019
Posted in: Uncategorized