ᐅ Heat contracting for two rental apartments in a new building?

Good morning,
I am building a house with two rental units. It will use geothermal energy as ground-source heat in a new development area. The heating company has offered to sell the heating system/ground-source heat pump including installation for about 30,000 euros gross (with natural cooling). The municipal utility company offers a contracting agreement with a factor of about 1.5 over a 15-year term. Everything is included: heating, maintenance, repairs. As a landlord, I could supposedly pass the leasing payments completely on to the tenants. The model sounds good at first. Especially with the ground-source heat pump, I hear that it is more difficult to adjust and manage. I don’t want to receive calls every week asking how to operate it...
What are the pros and cons? Is contracting becoming the trend? Are there any people here who have already entered into such contracting agreements and have experience?

[By the way, I sent a text message on Friday evening regarding the deadline for KfW55 – did it arrive?]

RheinAstrid schrieb:

The model sounds good at first. Especially with geothermal heat pumps, I hear it’s more difficult regarding settings, etc. Not that I want to get calls every week about how to operate it…

Then the scope of services should probably include that tenants can contact the contractor’s hotline for all heating-related questions. I’ve only dealt with heat contracting once, during my debt counseling work, and that wasn’t with municipal utilities. Still, I would say it’s probably better to consult a lawyer regarding the contract rather than a forum.

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RheinAstrid schrieb:

What are the advantages and disadvantages? Is contracting becoming a trend? Are there any people here who have already completed contracting and have experience?

Advantage: Provided the services meet your needs and you remain unaffected, you will have less effort handling malfunctions and billing. Possibly improved cash flow, since you don’t have to purchase the system.

Disadvantage: The service costs money and can make your rental property (unnecessarily) more expensive for the tenant. Possibly incomplete service in order to meet your convenience goals. (Who contacts the hotline? What happens when the units are sold? What about vacancies? What happens when the contract ends?)

Whether this is a trend—I don’t know. There are some offers, especially in the commercial sector, but accounting and terms tend to be handled differently there.

RheinAstrid schrieb:

What are the advantages and disadvantages?

After 15 years, you no longer have a heating system.
Banks tend to evaluate this negatively because the house does not have its own heating system, and you essentially have to transfer the space for the rented heating system for the contract duration.

RheinAstrid schrieb:

Is contracting becoming a trend?

In the private sector, it remains quite uncommon.

Benutzer200 schrieb:

An uncommon choice for private use.

In individual private building projects, probably yes. However, in the context of condominium townhouse developments, it seems to be different, as they tend to operate their combined heat and power (CHP) units like this more frequently.

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https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/

11ant schrieb:

However, in the case of condominium townhouse developments, it seems to be different; they often operate their combined heat and power plants that way.

Yep. But I wouldn’t really consider that “private.” Often, actual heating stations are built to supply the entire development (similar to the dream houses). In such cases, a combined heat and power plant also shows its advantages.