If you are a landlord, keeping your property functional and in great shape is a priority that both you and your tenants should share. Knowing what you are responsible for and what your tenants are in charge of such as maintenance, replacements, and installation are important aspects of what is agreed upon while renting out your property.
One of the most troublesome situations is when an HVAC (heating, ventilation, and air conditioning) unit is compromised in one way or another. The two most common solutions are either HVAC repair or the more expensive HVAC replacement.
Maintaining these units to keep them in tip-top shape can help keep your total costs down.
Let us take a look at some of the important tips made by a local Florida HVAC company on what you need to know about HVAC care when renting out your property.
Start with the basics
More than likely, you are already familiar with the fact that lease agreements contain clauses, conditions, and terms meant to detail the responsibilities of the tenant as well as the property manager or owner.
However, before you commit to certain terms, take a look at the three main considerations surrounding heating and cooling:
- Heating: All rental units must meet the implied warranty of habitability, which signifies that some method of heat must be provided. Exact requirements will vary from state to state. Florida is likely not as strict with heating requirements as the northern states but there are still requirements to meet.
- Ventilation: This is often neglected due to more pressing concerns, but that is a mistake that could end up being quite costly. Air needs to move freely throughout the rental unit. If it is unable to do so, then concerns like mold, wood rot, pest infestation, and other problems can occur. This is especially important in humid climates like Florida. Make sure you have a plan in place for ventilation maintenance.
- Air Conditioning: Even in hot Florida, landlords are not required to provide air conditioning services for tenants. However, this state is extremely hot most of the year so it is unlikely you will keep your units filled if you do not offer this important amenity. Fortunately, there are multiple ways to determine how AC units are to be maintained between you and the tenant.
Determining Responsibility
There are three main ways you can divide responsibilities, provided they do not violate any state or city laws. The options include:
- Shared Payment: This is fast becoming the most common method chosen by property managers, and for good reason. This option lets you split the fees between the tenant and the office. This covers the repairs, replacement, and maintenance needed to maintain your HVAC unit. To ensure that this option benefits everyone, it is recommended to use a professional HVAC company’s service contract for regular maintenance and repair. You can split the fee for the contract according to terms dictated in your lease. Just make sure to leave yourself protected in the event the tenant is negligent or irresponsible in their operation of the HVAC unit.
- Landlord Maintained: Another popular option; this allows you to have full control of the repair and replacement process. Most choose to set specific maintenance hours with an extra charge being common for after-hours work. You can optimize your costs by ensuring the rent reflects the services you provide as well as securing a superior service contract.
- Tenant Maintained: If you feel like the tenant should have more responsibility in this matter, then you may want to consider having them pay for more minor things such as new filters and standard service calls.
Some examples would include malfunctions and normal cleaning. With this arrangement, it is recommended you take over the major services as they come up. Also, you can further minimize your costs by having the tenant pay for utilities, which includes heating and cooling.
Understanding Taxes
Being a landlord is expensive. At some point, you will have to make improvements or renovations to your building. The good news is that these efforts can offer tax benefits as shown below:
- HVAC maintenance, repairs, or replacement can sometimes be considered a restoration because the replacement of any major component of the HVAC system is considered a capital improvement as defined by tax laws.
- HVAC improvement benefits are generally depreciated over the time period of approximately 27.5 years. The method of depreciation used is the straight-line method.
HVAC Maintenance
Regular HVAC maintenance can help prevent stress and expensive unit replacements. To do so, you want to make sure you inspect the property regularly. This will include inspecting the HVAC system.
This is because HVAC technicians can diagnose and correct potential problems before they occur.
To keep your property’s HVAC unit running smoothly at top efficiency, be sure to call your local HVAC experts to set up a custom maintenance plan suited to your needs.