Does Installing AC Make Financial Sense for Landlords?

Should you install air conditioning in your Portland rental unit? There are several factors to consider. For many tenants, a lack of AC might be a dealbreaker when considering a new rental. On the other hand, will including an AC unit make up for the cost of installation? While the price tag of installing air conditioning can be a significant deterrent, rentals with AC units have many benefits.

Do Tenants Need AC in Portland? 

One of the questions to consider when deciding whether to install AC in your Portland rental is whether or not your unit needs air conditioning in the first place. Portland’s mild summers have meant that many buildings in the area do not have air conditioning. In fact, the average high temperature during the hottest months of the year usually averages around 80 degrees. Lower humidity than areas in the American east and south also mean that while temperatures can spike in the hottest part of the day, they can drop into the 50s at night to provide cool relief.

However, as recent summers have shown, intense heat waves are not unheard of. In 2021, Portland’s temperatures soared to an all-time high of 119 degrees. The heat wave blistered the area for multiple days and offering only marginal relief at night. While this weather event was unusual, there’s no denying that people with AC units were safer and more comfortable. As a result, many tenants in the area may plan for a worst-case scenario when looking for an apartment.

Each Unit Has Different Temperature Needs

Whether or not you should install AC in your rental depends partially on the rental itself. Is the unit on a hillside that spends part of the day in the shade? Are there trees to help keep the sun off? Are many of the windows west or south facing? Is it an upper-story unit or a basement? Units protected from the direct sunlight by environmental factors or tree cover will tend to stay cooler than a south-facing, second-story apartment. A building’s construction materials can also make a difference in retaining or reflecting heat. Units in heavily paved areas will also tend to get hotter compared to rentals with yards and greenery to help dissipate the heat. 

The best course of action is to evaluate your rental unit for its unique fixtures. If you’ve spent time in the unit during the summer, determine whether it’s possible to keep the interior comfortable. If not, you may want to consider installing AC. 

The Benefits of Installing AC 

Air conditioning might not be necessary in Portland, but it can be a selling point. After last year’s heat wave, many tenants are searching for a unit that guarantees they’ll be comfortable even if the temperatures spike. As people from all over the country flock to our beautiful city, many may be coming from hotter areas where AC is a given. When faced with the vast number of rentals Portland offers, whether or not a unit has air conditioning is an easy way for prospective renters to narrow down the field. Installing AC in your rental is one way to ensure your rental continues to stand out. 

Installing AC in your Portland rental can also be a great way to improve your tenant retention. Tenants who move into a rental unit in January might be pleased in their new home–until August rolls around and they realize the lack of AC makes for a couple of miserable weeks. Some tenants might even decide to move out at the end of their lease and find a place with more consistent climate control. The amount of money you lose in tenant turnover and vacancies can ultimately add up–but will it add up enough to justify installing AC?

The Cost of Installing AC

The cost of installing air conditioning in a unit can vary. The price will ultimately depend on your rental’s square footage, the amount the air conditioner will be used, the efficiency of your home’s building materials, and whether you’re installing a new or replacement system. Cooling an entire house will be more expensive than cooling a single room or studio apartment. Central AC usually ranges between $5,000 and $10,000–a steep initial cost for small landlords. Ductless systems can be even more expensive than central air but can also be customized room-by-room to increase efficiency.

The costs can be very different if your rental unit is a single room or studio apartment. Installing a window or portable AC unit will often range in the hundreds of dollars rather than the thousands. Window air conditioners are the cheapest way to keep cool, and tend to be more efficient than their portable AC counterparts. However, many areas have special zoning laws pertaining to window air conditioners. 

Is Installing AC in Your Rental Necessary?

You don’t necessarily need to have air conditioning in your Portland rental unit. However, the benefits mentioned above can make it a smart option. If you don’t have air conditioning in your unit, you can compensate in your listing by mentioning trees, shady evenings, or other factors that keep the temperature cool. If you do have air conditioning, make sure to list it prominently–it can be a big attraction for some tenants. 

A solid listing and marketing approach can make up for a lack of air conditioning. Rent Portland Homes by Darla Andrew is Portland’s best property management company, with a dedicated team of marketing agents and contractors ready to step in and make your property shine. Working with us means leaving behind all the stress and complications of running your rental. We can help you determine whether installing AC in your Portland rental makes the most financial sense and handle all the necessary maintenance, repair work, tenant communications, and more. You don’t have to worry about anything more than enjoying the benefits of a successful rental property. For more information, call or text us at (503) 515-3170 or reach out on the contact page on our website.