New Install: Choose Propane or Oil?

I'm evaluating purchasing a rental property where a renovation of the heating system is needed. All tenants currently run off of a shared oil boiler with baseboard radiators. DHW is electric water heaters. Points below:

1. Property is located in Southern NH which has cold winters.
2. Multi-unit dwelling where I'd like to segregate the tenant utilities. I absolutely do not want to pay for tenant's propane or oil so this is non-negotiable. Future design must include this element and have tenant responsible for own fuel.
3. No Natural gas, Must be electric, oil or propane. As much as I love coal, I don't trust tenants to tend a stoker or other solid fuel burning device.
4. Building has a chimney so all units could be vented there. I would like to use it for venting rather than powerventing through opening in side of building. Arguably, a powervented condensing boiler/furnace is the most efficient but there will be a cost to buy such a sophisticated efficient boiler/furnace. A cheaper non-condensing boiler/furnace is better for me to purchase from a landlord perspective. note: This is just a preliminary pricing of equipment with minimal research that I have done and not indicative of what I may actually find. If this were my own residence, I would undoubtedly want the higher efficiency condensing models, but if cost is unfeasible in a tenant installation, they are not getting it.
5. Basement has the space for each tenant's oil tank assuming I went that route. This is one strike against oil since that space could be rented to a tenant for storage purposes.
6. Outdoor near house has space for each tenant's propane tank assuming I went that route.

I am just stuck on which fuel to choose for my future tenants. If you were a tenant, would you necessarily choose one place over another because one had oil and the other had propane heat?

I am leaning towards propane heat since a local plumber told me that propane can "tolerate short cycling better than oil and is more efficient in the long run". Also propane burns "cleaner" than oil and requires less servicing/cleaning. If I have propane, I can also plumb in a propane cooking stove; I know many people like cooking on a "gas" stove vs electric. (Is that something most tenants want? I love cooking and don't like electric stoves). Also with propane, you need to have it filled by a propane company. Since it is a sealed pressurized cylinder, there is no oil tank sabotage that can occur with propane e.g. someone opening the oil tank nozzle and pouring water etc.. into it. Propane has lower heat energy per gallon when compared to oil, but again the cost of the fuel will be the tenant responsibility and not mine.

Any opinions/help is greatly appreciated. What do you guys think? Thanks...

Given that choice here in MA, I'd go oil ANY day over proPAIN - that stuff is STUPID expensive in MA. Close to the same price per gallon, yet propane has quite a few LESS BTU's ... a no brainer here anyway.

Maintenance consists of a filter change, nozzle change, and cleaning of the flue and heat exchanger once per year ...or longer. If the heat is the tenants responsibility, then the cleaning & maintenance (or lack of) should be too. Oil tanks last decades, even being outdoors above ground, and oil is easier to deal with - can run diesel fuel or kerosene in a pinch.

I wouldn't trust a tenant with a propane or NG stove if I could avoid it.

Oil is simpler, cheaper, and, while it does have a (pretty simple) yearly maintenance requirement, it is FAR less costly to repair in the event of a control/component failure, it also (provided simple yearly maintenance is done) is far cheaper to fix. Oil furnaces as a whole (esp. thermopride, williamson, and others) have a MUCH longer life expectancy than propane forced appliances, at least double.

I'll post my .02 since I work on these things everyday for a living. Both have their pros and cons. For one, wether you go oil or propane if you are doing natural draft you WILL NOT be allowed to vent several appliances into one chimney. So you will have to install a series of B vents for your gas boilers. The b vent deal does not apply to oil!!! There are kits with inducer motors that claim to work. While they do "work" your units will pack with soot and fail causing a no heat condition every year. Trust me on this!! So your high efficiency gas boilers vented with pvc pipe will be your best bet regarding this. Also, you will need to check your local codes and see how much fuel oil you can store in a building. Where I live it is only 600 gal. Same applies to your propane tanks outside in reference to proximity to property lines and buildings. Most likely why the building is on a shared boiler. Oil will heat a boiler up faster than propane hands down. Oil will need an annual service every year that includes a nozzle, pump strainer, oil filter, and heat exchanger brushing. Propane will burn much cleaner and you could stretch your service intervals. Where I live oil is 3.50 a gal. While propane is 1.40 a gal. As far as the boiler itself both will have electronic components and switches that can equally fail. Oil= primary control, cad cell, ignition transformer, etc. Propane= pressure switch(if equipped) ignition control module, gas valve. The bottom line is oil will be faster but require more service. To answer your fuel choice you will need to compare price per gallon of each fuel in your area and factor in the BTU content per gallon of each fuel to make the best choice. Hope this helps a bit.

One other thing, if you don't annually service oil your break downs will be far more often than with propane. Parts are a draw when it comes to cost for oil vs. propane.

Thanks Blackbetty, I was looking for an opinion from the service angle. Appreciate your response.

BlackBetty06 wrote:One other thing, if you don't annually service oil your break downs will be far more often than with propane. Parts are a draw when it comes to cost for oil vs. propane.

Fuel costs are higher with propane, lack of maintenance is more detrimental to oil. However, parts are NOT a draw. Modern propane furnaces are more expensive to diagnose and parts are far more expensive.

As long as chimney can handle the volume, units running same fuel can be tied together and run into it.

I just went through this with the local propane dealer as I was thinking of switching to propane forced hot air to replace my oil fired furnace.

I have two above ground120 gal tanks for my kitchen gas range and stby 15kw genset.

It's too expensive to switch to propane primarily because I would have to put a 1000 gal tank in the ground to be able to get favorable pricing on the gas. This would cost $6000.

The gas becomes to pricey only buying 160 at a clip or having them deliver monthly.

Otherwise when you subtract the annual servicing and maintainence contract cost the fuel gets close to being a wash. At least in western mass.

The original poster is not talking about a FURNACE, he is talking about a boiler. There is a huge difference when it comes to parts from a furnace to a boiler. Parts ARE a draw with a boiler and can be CHEAPER sometimes with propane. An oil fired boilers electrical parts are as follows: Burner motor (well over 100 if fails), Ignition control transformer (over 50 if fails) Primary control ( well over 100 if fails) Cad Cell (not very expesive if fails.

Propane depends- If standing pilot you have A thermopile powered gas valve( over 100 if fails) and a thermopile (30 bucks tops) thats it for that boiler. So its CHEAPER than oil!

80%plus propane furnace has an ignition control module and spark to pilot most time( 100-150 if fails) Sometimes they have an inducer motor to pull a draft through the boiler (100-200 if fails) Thats it!
THE ONLY propane boiler that will likely be more expensive parts wise is a condensing high efficency boiler!

Oil and Propane boilers both use a circulator pump and a thermostat.

Unless parts and service companies are outrageous where you live parts ARE a draw at best. I repair atleast 100 boilers a winter being powered by Natural Gas, Propane, and Oil. I am posting on actual facts that happen every day and what I am charging customers and facilities. As I post this I am working on 2 small oil steam boilers (200K BTU and 350K btu) that are taking over 2 days to service due to neglect. For every one sooted up gas boiler I clean, there are 10 oil ones that follow. Last week I cleaned a 2 Million BTU gas boiler that hadn't been serviced in 5 years. I was done in 9 hours. That gives you an idea of the differences. If you really want a mess work on a Clean Burn waste oil burner.

Also modern gas heating systems Boiler or Furnace have built in diagnostics which practically tell you why its not running so they are easier to diagnose most times. Not always. Did you ever see an oil boiler or furnace that wouldn't light so the owner just kept pushing the red button?? Talk about an expensive service call.

Every location will be different due to building configuration, fuel availability etc etc etc.

In the southern coal region in NEPA rental units are being converted from oil to electric baseboard. Propane is way too expensive to even be considered. Property around here is dirt cheap, buyers market, buyers buffet, buyers you name it. Flippers are buying as many houses and buildings as they can get at the sheriff sales and tax sales, ripping out the oil boilers, tanks, piping and radiators upgrading service panels to 200 amp and installing baseboard electric and bingo bango they are rented out in a couple of weeks. They then make the tenant responsible for electric taking the landlord right out of the heating supply business.

In a lot of the cases they leave the boiler and tank in the basement, sell any remaining oil in the tanks, sawzall the steam/hot water heating piping at just below the floor level, scrap the radiators for cast iron and away you go. Electric is expensive here but if I ain't supplying heat, what do I care, is their attitude.

Nat Gas right now is giving coal a run for it's money where Nat Gas is available in NEPA. I recently had to choose a heating system for our church building we rent. It was between coal and nat gas for heating. A hot water oil boiler was there but no piping and no radiators. Someone broke in long before we got there and cleaned it all out. At $3.45 a gallon oil took itself out of the running. Coal was my next choice but I couldn't get people to commit to 100% without fail that they would fill it with coal and take out the ash. A cheap abundant heating fuel doesn't do you any good unless someone is going to put it in!!!

The gas company said they would run a line to the building for FREE if we heated with nat gas. A donor gave us a 100K BTU two stage hot air scorcher for free. Gas line installed to building for free, air scorcher for free.....easy decision to make. Total spent to install heat for our church, $742. Volunteers ran the gas lines from the meter to the furnace and a small free standing 20K BTU unit for that little extra when you don't need the big unit to run. We installed the flexible ducting and floor vents. This was a no brainer. Kinda ironic when here we are sitting in the southern anthracite coal fields 15 minutes in any direction to four coal yards and decided to go with nat gas. I would say go figure but that's exactly what we did and long term, nat gas won.

Our landlord loves us since it cost him nothing and he now owns a heated building. We got a good break on the rent because no heat was the least of the issues this building had when we moved in.

It all boils down to dollars and cents on operating costs and maybe more so when you factor in how often are you going to have to look at the unit.. Some areas have copious amounts of nat gas, some oil, some propane, some coal, some wood. What's it gonna cost YOU to stay warm during the winter.

Count the cost of everything, not just the equipment and for sure not just the fuel. Count the cost is not just a biblical admonition for ministry. It covers everything we do in life. Just don't go into analysis paralysis while your counting the costs.

Rev. Larry

I'm still on the record for oil products. Not many folks will work on a propane or NG unit themselves. Like anything else, you MUST be comfortable with the machinery. Pressing a reset is a small task everyone can do, but repeatedly doing so could cause a minor blow-back if it does relight itself. No one will die. Propane or NG.....not necessarily so. The complexity of safety devices on both demand that if you are a happy homeowner, you better have your 'ship' together or DON'T touch it!!!!! If you change the oil on your own equipment, you are not afraid of a filter change, nozzle replacement, or cleaning boiler passages. If not, don't even attempt. I am well aware of the clean burn characteristics of gas appliances, but the prices of each fuel where I live are very close. That being said, a gallon of oil is 144K btu's/gallon +/-, and propane is 92K btu's/gallon+/-. No one to my knowledge has ever died IF an oil tank ruptured or had a leak. A mess, sure, but not having your house blown into the next block...... It is a personal choice, so do whatever you are comfortable with.

One other thing.....if you do not own your own propane tank, you are gonna have your prostate massaged regularily for a loooooonnnnnggggggggg time by your fuel dealer.
Whatever floats your boat. Last time I looked it was a free country........but they are barking and biting at our coat tails.
NG sure is cheap right now, but many of us will never see it, and what the heck, Coal is what's for winter anyway!!!!!! Plus, I REALLY like 'Made in America' products stored at my property.

If you are going to rent it out I would do electric heat. If you are going to flip / resell in the very near future then I would go with oil.

I own two rentals that are both electric heat. The tenants are more likely to pay up their electric bill in order to keep their phone chargers working so they can keep their social media sites updated with their minute by minute activities that everyone needs to know about. I suspect the cable bill is paid up, but I know they are routinely late with their water bills and I guess they would be late with heating oil responsibilities possibly allowing pipes to freeze and causing me more headaches.

titleist1 wrote:I own two rentals that are both electric heat. The tenants are more likely to pay up their electric bill in order to keep their phone chargers working so they can keep their social media sites updated with their minute by minute activities that everyone needs to know about. I suspect the cable bill is paid up, but I know they are routinely late with their water bills and I guess they would be late with heating oil responsibilities possibly allowing pipes to freeze and causing me more headaches.

I'm glad this thread experienced a revival. I think what you said above is all too true about tenant behavior and making me reconsider electric heat. However, electric is expensive per kilowatt-hour here in NH and I'm wondering if this would drive away potential tenants. Hell, oil is expensive too but we are all accustomed here to paying for that. Keeping the landlord out of heating is a big advantage.

However, I'm not too convinced about electric heat. I've seen the problem I am about to describe in more than one location. Picture an electric baseboard heater mounted on the wall. You have a door nearby that when open, rests flush against the radiator. I have seen scorch marks on a wooden door on the part that rests against the radiator. You don't have this problem with water baseboard heating; those only get up to 200 degrees or so. But if an electric baseboard can get hot enough to scorch and cause black marks on a door, I wonder about the fire hazard potential. Do these units really get that hot? What if it is not a door but what if a tenant pushes furniture up against it or curtains are too close? Are these units safe?

NJJoe wrote:electric is expensive per kilowatt-hour here in NH and I'm wondering if this would drive away potential tenants

My experience with potential tenants is that they don't think that far ahead. Just tell them electric heat is 100% efficient and they will jump at the opportunity to heat with it! Thankfully, I haven't seen any scorching issues like you describe. Although I had new electric baseboard units put in as part of the rehab of the properties. So maybe the newer ones operate at a lower temp than older ones, or maybe the ones you saw scorching the door were damaged somehow?!

Would the fuel oil company account be in your name or the tenants? I ask because down here, the water company won't put the account in the tenants. They put it in the property owners name, that is how I know for sure they are habitually late on payments, didn't know if oil company would be that way or not.