Energy costs are a hot topic in real estate investing, and one question dominates the rest: Should you switch from oil to gas heating?

While it is true that gas is cheaper and more efficient than oil, it doesn’t automatically make it the preferred choice for the house you’re selling or renting. Let’s examine how energy sources affect your bottom line.


Home heating is usually done with oil or gas; alternate methods include propane and electric. Gas and oil require furnaces, though oil furnaces are far larger than their gas counterpart. Because of this, many people consider an oil to gas conversion: It will free up space. However, both furnace types do make it easier to heat a home. While some homes use oil to heat water, the majority use it for space heating.

Price Comparison

It is true that oil heat is always the more expensive energy option, despite declining oil prices over the years. Although energy costs vary depending on how deep the mercury falls in the wintertime, oil-powered heating systems almost always cost more than gas or electric-powered ones.

Throughout the winter, temperatures fluctuate, as do energy bills.Customers often opt for some sort of budget with their energy company. Gas customers will usually be expected to pay a flat fee based on a 12-month projected usage after a period of time (usually a year). On the other hand, customers of oil can usually lock in their price per gallon. Although this saves money, during a cold winter that gas tank will run out quicker. The unit price of oil may remain unchanged, but it is difficult to predict the number of units to be needed. Gas-powered homes are in high demand, especially in the Northeast because of their predictability.

Value Proposition

The U.S. Energy Information Administration reported that in 2018, approximately 5.5 million homes in the United States were heated with oil. 82% of these residences are located in the Northeast, a region known for its harsh winters.New York, New Jersey, Pennsylvania, and all six New England states make up the Northeast Census region.One in five homes in that region has an oil furnace.

House hunters who are thinking about buying a home must include energy expenses in their monthly budget. In spite of everyone paying utilities in order to heat their home, many homeowners consider oil-heating as a very expensive proposition. Accordingly, a home with gas heat would sell faster, especially if its neighbors also use gas heat.If you’re selling or renting in milder-climate states usually do not require turning up the heat.


Gas • More efficient burning

• Low maintenance

• Furnace runs more quietly

• Cleaner burn

• Not every home has access to a gas source

• Heat per BTU is less

• Furnace and conversion are expensive.

Oil • Greater heat output per BTU

• Deliveries are easy and frequent

Furnace price is lower

• Tanks are big.

• Maintenance is subject to a service contract.

• Burns less efficiently

• The cost of fuel is higher

Making the switch from oil to gas can cost thousands of dollars.A huge amount of work may be needed to remove a large oil tank and connect a new one to a gas line in a home. Many homeowners choose to use oil heat for this reason.

Gas companies provide homeowners with some sort of incentive or credit when they switch to natural gas. However, the return on investment may be years away.


Even though oil to gas conversion costs a lot, it might pay off in a faster sale or rental for investors. Renters and buyers must factor energy costs into their monthly budget, and at the end of the day natural gas is the most economical option.In the home, however, it will take them longer to see the ROI, since it takes years of lower heating bills to show the payback.


By Editor