Enter your email address for weekly access to top multifamily blogs!

Multifamily Blogs

This is some blog description about this site

Heating Oil Pricing – What YOU Can Do About It

With crude oil prices hovering around $80 a barrel in recent days following the end of the nationwide cold spell, it is an opportune time to discuss the importance of crude oil prices for multifamily building owners and management. This is especially important to owners in Harlem, the Bronx and the Upper East Side, where older heating systems using oil heat are still prevalent.

After real estate taxes, heating oil (for those who use it) is the greatest expense in a multifamily building. More importantly, oil is an expense that is completely out of your control as a consumer. Major global investment bank energy analysts are predicting short-term prices above $80 per barrel before oil markets tighten in the coming years.

Throughout the New York City area, many residential and multifamily buildings are still heated by oil – but you don’t have to be at the mercy of market price swings, which are affected by any number of factors around the world. It may be possible that switching your heating source from oil to natural gas may decrease your building expenses considerably over the long run. Natural gas is currently selling for less than half that of oil per million BTU and is therefore a less expensive alternative. However, replacing an oil boiler with a gas system (complete with gas lines) can be a costly endeavor. Electing to replace a failing boiler with a natural gas system can be a sensible, cost-saving idea. Alternatively, if your heating system is running well, you should calculate the life-cycle cost of replacing your system, as you may be better off investing your money elsewhere right now.

 

Additionally, if you are not yet ready to give up on oil heat, there are several avenues you may still explore. Consider a ‘conversion’ boiler that can be hooked up to both gas and oil sources, and can be run on either fuel depending on which is more cost effective at the time. Oil heating systems can also be run on biofuel blends that are more environmentally friendly and do not require modification to your existing units. Another idea to hedge the price of oil could be purchasing exchange traded funds (ETF’s) of oil companies – if the price of oil rises, your heating costs will increase, but your investment value will increase as well.

 

Recommended reading:

Rate this blog entry:
0
 

Comment Below

  1. Posting comment as a guest. Sign up or login to your account.
Attachments (0 / 3)
Share Your Location
[Note: You must be logged in to Grace Hill to follow the links in this blog post.]I started brainstorming new polls to submit to Grace Hill and decided it would be a good idea to go over the previous polls to make sure I wasn't overlapping a prior poll. So as I sifted through the literally hundreds of past polls, I came upon two that both shocked and depressed me. I'm hoping I'm reading the results wrong!The first poll I saw asked how much communities spent in resident retention per month. Almos...
The "green" movement has really hit its stride, which of course means that it is well on its way to being overdone in marketing (if it's not already there). So I'm wary of starting up a green-centered campaign because prospects might start seeing that as less than sincere as everybody jumps on the green bandwagon. That said, I'm still in favor of the actual plan of limiting waste, increasing recycling, etc, so it amazes me how few properties have paper recycling in the most obvious pla...
For a while we've heard that the key to resident satisfaction is providing excellent maintenance. Now although you know I think that is really only half of the equation, it is still vital to keeping your residents from running around with pitchforks trying to tar and feather your onsite team. But what exactly does providing great maintenance truly entail? Well, here are my three important aspects to providing great maintenance:1) Understand The Problem - As I'm sure you know, residents will sit ...