Updated: Jan 1, 2021
Do you know when to replace a water heater and is it better to rent or buy?
The life span of a water heater is between 8 and 12 years and there is a multitude of reasons as to why we should be replacing it before the expiration date. If you have a finished basement there is a possibility that the water heater can rust out and possibly flood your basement. This can potentially damage any of the finishing touches you have and cost you thousands in repairs. You also don’t want to get into a situation where you or your tenants run out of hot water. A reactive approach to this problem can leave you stranded for a couple days without hot water.
How old is my tank?
You can check the manufacturing date of the water tank by looking at the first 4 digits of the serial code. For example, with Rheem tanks the first two digits will indicate the month and the 3rd and 4th digit will highlight the year. Please note that some of the manufacturers do vary with how they communicate the manufacturing date, a quick Google search should provide you with more details. If you’re unsure I would highly recommend that you contact the manufacturer as they will have the most accurate information.
Buy vs Rent
Whether you should buy or rent the water heater unit will depend on you and your situation. If you're looking at holding the property for a long time (over 2 years) then you're probably better off buying the water tank. The main reason for this is the high fee that tank companies will charge you for the tank rental. The household water tank rental will cost $75 per month which is $900 per year. If you hold the property for two years you would have paid $1800 in rental fees. A 50 Gallon tank will cost approximately $1200 and installation will run you another $500. In two years, the purchase will basically offset the rental cost of the unit.
Food for thought: Our tank for example (pictured above) was manufactured July 1993 so you can imagine the number of fees that have been paid over the last 26 years ($23,400). You’re probably wondering to yourself – 26 years – but I thought you said tanks should be replaced every 8-12 years. I was extremely surprised as well to see this tank still holding up and not leaking. Take a moment and think about this, even if we replaced the tank 3 times over the course of 26 years, we would have still been better off by purchasing and would have saved $18,300. Please note that I didn’t take inflation into account to keep the example simple for the readers.
Not that easy: Now the rental company will not let you go that easy. There's usually some sort of fees related to getting rid of a rental unit. They will typically give you a couple of choices. Either you buy out their tank, they uninstall it and pick up, pick up only, or you drop it off. The only free option is if you drop it off yourself. All others come with some sort of fee attached. We typically will have a company come in install the new tank and uninstall the old tank (obviously). We will then pay the rental company to pick up the tank – typically costs around $60.
When choosing a tank, you need to keep a couple things in mind:
First, how is the tank being heated? There might be an opportunity to change the heat source to minimize your utilities cost. For example, in Southern Ontario it is more cost efficient to heat with gas vs hydro. This is something that you will need to discuss with your installer to make sure that you maximize your investment.
Second, do you need to install a water tank, or can you go tankless? There are pros and cons to using both. Our preference for our properties is the water tank but ask the installer and do some research before committing to either one.
Finally, there are two different types of water heaters venting systems. One ventilates through your chimney and the other vents through the PVC piping using a power blower. When we install our water heaters, we opt in for the power blower even if a different system was installed previously. The primary reason for this is the cost of upkeep to your chimney. Eventually our end goal over the horizon is to take down the chimney all together as long as there's no natural fireplace. The costs associated can include brick maintenance, pointing, and inner liner replacement.
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The information provided in this blog is for entertainment purposes only and is not intended to be a source of advice with respect to the material presented. The information contained in this blog do not represent legal or financial advice and should never be used without first consulting with a financial professional to determine what is in your best interest to meet your individual needs.
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