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Why are split systems so popular for rental properties?

16 July 2021

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Why are split systems so popular for residential properties?

When we look at answering this question, we are not evaluating the physical property itself, rather the landlord vs tenant arrangement. Obviously, the physical aspect of the property comes into play, however, it is a case-by-case basis in regard to what air conditioning system is going to suit one property over another. For this blog we will focus on stand-alone investment rental properties, as opposed to apartments or unit complexes. The types of air conditioning systems available, and most popular, in the residential market are wall mounted split systems, multi split systems (multiple indoor units and one outdoor unit), ducted air conditioning systems.

Wall mounted split system air conditioners have seen a surge in popularity in recent years and are now an extremely popular climate control option when investing in rental properties in Queensland and NSW. Nevertheless, as you can expect when looking at an investment rental property it mostly all comes down to the numbers. What numbers you may ask? Firstly, there is the initial outlay, or upfront cost, of the air conditioning equipment and installation. Secondly, being an investment rental property the landlord needs to factor in the time to pay back that upfront cost. Thirdly, ongoing electricity and servicing, or maintenance, costs. This will depend on the rental agreement the landlord has with the tenant and what the inclusions are and, who pays the electricity bills.

What is the cheapest air conditioning option?

The initial cost outlay for a wall mounted split system and installation is lower than a traditional central ducted air conditioning system. This may change when you start to look at multiple wall mounted split systems, or a multi split air conditioning system at the property. The cost outlay is a lot lower as usually there is a lot less involved with the installation itself, and the wall mounted split air conditioner cost is more minimal in comparison to a larger ducted air conditioning system. However, when looking at the ‘big picture’, the cheapest outlay might not be the best option in the long run for landlord.

How long will it take me to get return on my air conditioning investment?

There are so many variables to answering this question. If you look at the initial outlay alone, a wall mounted split system can cost anywhere between $1500 – $4000 to have installed. You may be able to earn an extra $30-$50 per week in rental income as your property is now more attractive having air conditioning installed, and this may enable you to pay off your investment in as little a 2.5-3 years. Not to mention the landlord may be eligible for tax benefits on this investment, and the capital value increase. Mind you there are other factors to consider that effect the payback rate such as securing long term tenants and minimising your vacancy rates. All these variables need to be considered.

Who benefits from an energy efficient air conditioning system?

Generally, it is the tenant that pays the electricity. From the landlord’s perspective this removes the financial incentive to outlay more initial cost to invest in the most efficient air conditioning system, or system with the most bells and whistles. If, however, the arrangement is that the landlord pays the electricity, then it might be more in their interest to have a more energy efficient air conditioning system installed.

Obviously, energy efficient air conditioning systems will run better and save you money in operating costs, and they are also better for the environment. Daikin, for example, invests heavily in research and development to continuously improve the energy efficiency of their products. Efficient, computer-designed air control surfaces, proprietary inverter technology and ‘intelligent eye’ sensors are just some of the innovations that make Daikin air conditioners amongst the most energy efficient on the market.

What are the air conditioning maintenance costs?

Finally, the last major factor to consider is ongoing preventative maintenance and breakdown and repair costs of the air conditioning system/s once installed. Maintaining your new investment by servicing it on a regular basis (we recommend yearly at a minimum) is highly recommended, after all, you want to get the maximum lifespan from your investment. Regular preventative maintenance not only assists in the prevention of unexpected, unfavourably timed and costly breakdowns, it will help to prolong the life and efficiency of your air conditioning system, whilst saving you money in unwanted electricity costs.

Servicing costs are usually per system, so if you were to have one wall mounted split system in your investment property this would be one set cost (well, that is how we charge our fees). Most air conditioning companies will then charge you a reduced fee for every other wall mounted split system you have to be serviced at the same time. Again, this is all quoted before attending site to service your systems, so there are no surprise monetary costs. The same operation with a ducted system, however, most residential properties only have one ducted system and so therefore only one fee every year for servicing. Depending on how many split systems you have in the property, it may be more expensive in maintenance costs to service yearly.

In summary, it will generally depend on the personal circumstances and investment strategy of the landlord as to the type of air conditioning system they choose to install. Wall mounted split systems are a great option as they are more cost effective to install and because you can control the operations per room, the electricity costs can be quite efficient. If the landlord is planning in investing for the long term, having an air-conditioned rental is appealing to secure a good long-term tenant and maintain low vacancy rates (oh, and to also keep the tenant appreciative in the hot and humid summers of Brisbane, Sunshine Coast and the Gold Coast).

Get in touch with us to discuss installing an air conditioning system for your rental investment property, (07)3256 6033, or email info@advair.com.au
If you have a rental investment property and your maintenance is due, or overdue, you can book it in here.

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