Promoted by ‘Metropolitan Plumbing’  

Once a hot water system has come to the end of its lifespan, there’s no way your tenants should have to put up with the problems that go along with it. 

Whether it’s cold water, no water, inconsistent temperatures or a complete lack of water pressure, your investment property’s hot water system is not a problem that can be ignored. Your tenants expect access to hot water and you need to decide on the best hot water system for the property in question. 

There are five key factors to consider when replacing your investment property’s hot water system – or in choosing a system for a property that is still being built. Each of these factors has an impact on the amount of energy you use and the utility cost. 

1. Cost of the System

When choosing a hot water system for your investment property, take into account the upfront costs along with the annual operating costs for each type of system.  

The cost of the system will be determined by a number of factors. These factors include: 

  • How many people live in the house? 
  • The size of the house and number of bathrooms 
  • Are there peak times when all tenants need hot water? 
  • Upfront cost and long-term expenditure 
  • Energy star rating of the system 

These factors will determine the cost of your new hot water system, so let’s examine what type and size of system you need to install in your investment property. 

2. Fuel Source 

A hot water system can run on electricity, natural gas or solar energy. Each fuel source has its own advantages and disadvantages that are worth considering. 

  • Electricity – An electric hot water system is affordable to buy and install but one of the most expensive systems to run. It might be your only choice if your property isn’t connected to natural gas and you’re not planning to install solar panels. It’s also worth noting that companies are producing energy efficient models that are way ahead of the technology from 10 or 15 years ago. 
  • Electric heat pump – This is a combination of electricity and renewable energy. A heat pump hot water system draws in warm air, which is converted into heat, warming up the water. It is more efficient than an electrical heater, with three times as much energy created. These are most effective in warmer climates as they require a constant supply of warm air. 
  • Natural gas – Natural gas costs a third of what electricity does annually. While a gas unit costs more to install, that saving in energy bills will pay for your gas hot water system within two years. 
  • Solar – These systems are expensive upfront as they require the installation of solar panels. Another drawback is that, when there’s no sunlight, you’ll need an electric or gas booster to maximise efficiency all year round. However, the running costs are very low and you’ll be banking the savings in no time. Plus, of course, it’s eco-friendly.

3. Storage Tank or Continuous Flow?

The type of hot water system you choose will have a major impact on your running costs. Most Australian homes have a traditional storage tank hot water system but there’s a variation on that which has grown in popularity in recent years. 

Instantaneous hot water systems, also known as tankless or continuous flow water heaters, account for about 25% of domestic water heaters. Let’s take a look at these two options in more detail. 

  • Storage Tank Hot Water System – These are relatively simple in the way they work. Cold water is pumped into the tank from the mains and it is heated by a gas burner or electric element. The tank is insulated so the water stays hot. The water is stored at 60°C to prevent the growth of bacteria. Tempering valves cool the water flow to about 50°C.  
  • Continuous Flow Hot Water System – Instead of heating water that sits in a tank, instant hot water systems supply hot water only as you need it. When you turn on a hot water tap, this triggers a flow sensor which turns on the electric heating element or gas burner. As soon as you turn the hot water tap off, the flow sensor turns off and the heat exchanger stops heating the water. 

4. Size of the Hot Water System

A hot water system is certainly not a one-size-fits-all type of appliance. The size of the unit that fits your investment property’s needs will again be determined by a number of factors. 

The factors are similar to cost considerations, including:  

  • How many people are living in the house? 
  • How many bathrooms are there? 
  • Are they using peak or off-peak power? 
  • Storage tank or continuous flow hot water systems? 
  • What is your power source? 

If you know the answers to these questions, speak to a hot water system specialist to determine the best choice for your property. 

5. Energy Efficiency

When it comes to energy efficiency, there’s no doubt that solar-powered hot water systems lead the way. While these systems are usually either gas or electric boosted, they are still well ahead when it comes to conserving energy and, in the long term, saving money on energy bills. 

A gas-powered hot water system is the next best option, followed by an electric heat pump system. That leaves the electric hot water system as the least energy efficient and most costly. 

Then there’s the difference between storage tank and continuous flow systems, with the latter preferable in smaller households of 1-4 people and a storage tank the better choice for groups of five or more tenants. 

The Bottom Line 

In the end, the type of system you choose will be determined by what you’re willing to spend upfront, taking into account the number of people and bathrooms in your investment property. Combining all of the above factors – along with speaking with a hot water system expert – will help you to make the right choice.