There are few things more comforting than curling up in front of a fireplace with a cup of tea and a good book. If you’re an investor with rental properties, however, the thought of an active fire inside your hard-earned investment might fill your heart with fear. Many prospective real estate investors face a tough choice: What to do with the fireplaces inside their investment properties.
On one hand, fireplaces could elevate the value of your rental property to prospective residents. Fireplaces exude charm and coziness; the presence of a functional fireplace could allow you to boost the amount of rental income you earn from the unit.
Conversely, fireplaces represent a significant liability, and they pose a number of maintenance needs. Any additional income you earn from the fireplace could be eaten up by inflated insurance premiums, chimney cleaning and other expenses associated with fireplace ownership.
Focus on the benefits of fireplaces
Many property investors respond to the presence of a fireplace in their property with a simple solution: bricking up the fireplace and ignoring it. While this may be the safest solution, it’s worth considering the benefits of maintaining a fireplace at your rental property.
Wood-burning fireplaces are romantic, and many people are willing to pay a premium to live in a property with a functioning one. Depending on the market that your investment property is in, you may be able to justify the elevated risk and insurance premiums with the additional income that your fireplace will bring in.
Mind the risks of a fireplace
While fireplaces do carry benefits, it’s also important to recognize the risks they pose to your property and to your tenants. There are more than a few reasons you may want to consider removing the fireplace from your investment property, including the following:
•They attract pests: Traditional wood-burning fireplaces provide pests with an easy point of entry into your rental units. This can complicate your existing pest control measures, and make it more difficult to eradicate insects and rodents, particularly when the fireplace is not in-use during the summer months.
•People don’t know how to use them: While lots of people like the idea of a fireplace in their home, very few people actually possess the experience and skill necessary to use them. Residents may overfill the fireplace or not close the protective screen correctly, resulting in smoke damage – or worse.
•Liability: The obvious downside to an in-unit fireplace is the added liability. They will raise your property insurance premiums. If your tenants don’t possess renters’ insurance, you may be on the hook for any damage the fireplace causes to the property. Additionally, they pose a safety risk for your tenants, and are particularly dangerous for tenants with children.
If you are on the fence about whether you want to remove or leave your investment property’s fireplace intact, there are a number of middle-ground options worth considering. For instance, you may be able to install a safer fireplace insert into the existing fireplace space. Here are just some of the alternative fireplace types available:
•Gas fireplaces: Replacing a wood-burning stove with a gas fireplace is a great way to reduce the risk and liability associated with a fireplace, while maintaining the aesthetic of a burning flame. Many gas fireplaces and inserts are fully self-contained.
•Electric inserts: Similar to gas fireplaces, electric inserts are a safe alternative to traditional fireplaces. While they lack the attractive look of a real fireplace, they are more effective at generating heat and are fully contained, reducing risk.
•Ethanol fireplaces: These are easy-to-install fireplaces that don’t require an external venting system, meaning they can be easily transported between units. Ethanol fireplaces are safer and more effective at producing heat than traditional wood-burning stoves.
•Pellet stoves: If you want the glamor and romance of burning wood with a lower level of risk and more effective heating patterns, consider installing a pellet stove at your rental property. These unique heating devices use compressed wood pellets fed through an automated hopper to generate heat.
Regardless of what you decide to do with your investment property’s fireplace, it’s important to be aware of the costs, benefits and risks associated with maintaining it. Consider discussing the decision with other investors to get an insider’s view on whether keeping your property’s fireplace is worthwhile. Whatever you decide to do, the best decision you can make is one that’s informed by the pros and cons.