How important is central air in a rental home?

So, really, how important is central air anyway?  Can't tenants just get a fan or a window unit?

We get this question a lot from investors and homeowners who are looking to rent their investment property to a new tenant.  Is central air worth the cost?  It is too expensive to put in for not much of an investment, right?

Well, according to a study by Zillow, tenants in the Metro Detroit area are willing to pay on average an additional 2.4% in rent for a home with central air conditioning.  In many cases, central air is more important to renters than great outdoor space or nice patios.


What does that mean to a landlord?


Well, the cost does depend on the size of the home, of course.  On a house around 1,000 square foot in size, the cost would be around $1,500.  (Don’t quote me! We would get an actual quote for you.)


If the average rent is about $1,000 for that house, the increase would take the rent to around $1,025.  That cost would take about 60 months to pay for itself, but that isn’t the only factor.  A house with central air will rent quicker, allowing you to fill it more quickly between tenants than a home without air.


The central air also comes into account when you decide to sell the investment property.  In Metro Detroit, that number is on average a 5.8% premium on the sales end.  Taking a $100,000 to closer to $105,000 which would more than cover the original cost.


While the final decision to install central air-conditioning is up to the investor, the decision on what house to rent comes down to the tenant.  Heck, isn’t $25 per month worth it in a hot, humid Michigan summer?


Brian DiBartolomeo is the owner/broker of Cherry Hill Real Estate | Aspect Properties in Pontiac, Michigan.  CHRE helps investors find new properties and provides property management services throughout the Metro Detroit Area.