The Hidden HVAC Problems Property Owners Miss Before They Turn Into Major Building Costs

 

Tristan Rodewald (00:00)
But that just

means we’re doing a good job, right? In my ideal scenario, you walk into a building, what do you feel? Nothing. You’re perfectly comfortable for the moment you step in there. That means we did our job well. But the reality is it’s significant investment, it requires a ton of upkeep,

Cody Crabb (01:50)
Welcome back to the Real Estate Pros podcast. I’m Cody Crabb with Investor Fuel. Today joining me is Tristan Rodewald, an HVAC and building systems consultant. So we’re gonna talk about what property owners and investors need to understand about HVAC maintenance, what changes when a building gets repurposed. ⁓ We’re gonna talk about a lot of stuff that you’re gonna need to know. He’s the guy to talk to. So thanks for joining me today, Tristan.

Tristan Rodewald (02:13)
Hey Cody, thanks for having me.

Cody Crabb (02:15)
So for people hearing about this for the first time, what does an HVAC and building systems consultant, like what do you actually do day to day?

Tristan Rodewald (02:24)
So the day-to-day is just kind of bridging the information gap.

think one of the terms that we use in the industry is like silos. There are people that are dedicated to their own trades, whether that’s building management systems, HVAC, plumbing, commercial real estate. And we’re all part of a bigger network, kind of a bigger web. The buildings that you see as you drive down the street day to day, we are all involved in that. And so to spread that information, to kind of break down those silos, help facilitate conversations, help keep people informed, ⁓ I would say that’s my most current role, as well as kind of talk about the changes in the new technology.

technology. ⁓ We’re very much in atomic transition. The world is changing. AI is running rampant. And I think there’s a role for that in both commercial real estate and HVAC.

Cody Crabb (03:10)
Yeah, I feel

that for sure. ⁓ just for example, so our audience kind of gets an idea. So what kinds of property situations would lead someone to kind of reach out to you for help?

Tristan Rodewald (03:41)
I think the best case or the best use case for someone reaching out to me or someone similar to my role would be someone who has multiple properties. ⁓ Typically, historically, you know, we’ve seen buildings as kind of standalone systems as they operate. Each building has their own HVAC system. You monitor that, you maintain that, you kind of check on that performance. ⁓ What the industry is going towards is a portfolio of buildings. A single pane of glass approach, almost like a

cloud based building management system ⁓ that we typically advocated to our customers. So let’s just say you own four or five different properties, each building operating on its own. You have the opportunity to pull all five buildings and analyze performance trends, energy usage metrics, utilities, all that. especially where I’m at in Richmond, Virginia, we see a lot of data centers being built here. Energy costs are rising. And so as those costs rise, we have to be

⁓ extra careful and pay special attention to how much our buildings are using, you know.

Cody Crabb (04:46)
For

yeah, something to keep an eye on for sure. ⁓ So just because our audience is mostly real estate investors and things, I’d love to talk about what’s something that people think about HVAC that they think they know, but they’re wrong. They assume incorrectly about it.

Tristan Rodewald (05:53)
What do people think about H-Rack that’s… Well, I think I’d argue that people just don’t think about it in general. ⁓

Cody Crabb (06:00)
Yeah,

true.

Tristan Rodewald (06:00)
that just

means we’re doing a good job, right? In my ideal scenario, you walk into a building, what do you feel? Nothing. You’re perfectly comfortable for the moment you step in there. That means we did our job well. But the reality is it’s significant investment, it requires a ton of upkeep, and it’s just stuck away in a mechanical

A lot of those, that large piece of equipment are outside, on the roof. It’s not something that the person occupying the space really has to think about. But these are expensive systems, significant investment, they need to be updated.

maintained, cared for, and properly controlled. And a lot of people think that you can just kind of push off, know, or neglect these systems and it ends up costing you down the line.

Cody Crabb (06:42)
Yeah,

that’s the case with just about everything in a property where the more you neglect it, although this sounds kind of like a special case, because it’s like out of sight, out of mind kind of thing. Like it’s not something you look at every day, whereas like plumbing and things, like you’re around it all day. So that seems like something you should ⁓ be pretty proactive about for sure.

Tristan Rodewald (07:02)
It’s really not a big deal until something happens. You’d hate for your system to break down and then all of a sudden you’d probably get 50 calls from your tenants. know, oh my gosh, this isn’t working. It’s blazing hot outside. Or if you’re where I am, we just had a cold snap. It was 70 and beautiful and then all of a sudden it was freezing cold. We got snow one day. So if your heat pump system isn’t working, now you got people freezing. You know, that just can’t happen. And so proper maintenance, you know, upkeep is just more

Cody Crabb (07:06)
Well that’s true with everything.

Uh-huh.

Tristan Rodewald (07:32)
more important now more than ever.

Cody Crabb (07:35)
Yeah, so my first thought is, ⁓ based on what you’ve said so far, ⁓ I think about what would our audience ask you if they could? What’s the most expensive HVAC mistake you see people make?

Tristan Rodewald (07:57)
most expensive. Well, I would say the most expensive you can make is throwing down the wrong piece of equipment like matched the wrong electrical. You gotta be super careful when you’re getting new systems, especially so the HVAC industry is going through a bit of a change right now. ⁓

kind of in parallel to all these new technologies coming out, actually had a, this all goes back to the Paris Climate Accords. So the refrigerant that we use in these systems are required to become more more efficient to reduce our global warming potential. And so these deadlines come up every four to five to six years where we have to take all the existing products and systems that we have on the line and change them and change the refrigerant in them. We just went through a refrigerant transition two years ago.

For a lot of, for most intensive purposes, like, it really hasn’t changed how the systems operate, besides maybe the compressors that are in them and the electrical draw that they need. So I would say worst case scenario is you go to replace an existing system that uses maybe R32 or R410 with something like R454B and the electrical increased, now you gotta resize all that wire, that thing is gonna be a brick until you get that right.

Alternatively, I’d say, you know, just not properly controlling the systems. ⁓ We have been building this equipment for decades ⁓ and while the machines are getting more more efficient, there is an upper limit to how efficient we can get. And so when it comes to controlling them, you know, different control strategies, I kind of spoke that earlier, kind of like a high level portfolio of them, as well as like, you know, more intricate systems ⁓ can increase

Cody Crabb (09:17)
Yeah, I feel.

Tristan Rodewald (09:46)
efficiency of it. Whereas you know in terms of compressors you know how high lift we can get you know that ain’t going to change too much.

Cody Crabb (09:54)
Yeah, that’s a good point. Coming up to a ceiling is probably not too far in I mean, everyone says that until there’s ⁓ inevitably someone breaks through that ceiling. yeah,

Tristan Rodewald (10:06)
That’d be exciting.

Cody Crabb (10:42)
that’s cool. ⁓ So, okay. What I’d be curious to ask about is where do you see… If you’re a new ⁓ real estate investor that you’re operating in this space, you’re dealing with HVAC issues,

What is it, how often should you be kind of inspecting things? What should you be looking for and when is it time to call someone?

Tristan Rodewald (11:05)
I would say it’s something that if you haven’t called someone yet, I would call them now. There are people who kind of dedicate their time who do like service contracts and they kind of keep tabs on that for you. We have smart buildings now and so you could reach out to a contractor who can install like an AI powered or you know, a higher building management system that kind of tracks that data and kind of spits it out to you in a very legible, non-technical way. In terms of looking for

to the future. Right now we have a lot of gas-based or utilities-based ⁓ equipment and as we try and move away from natural gas and you know maybe the less clean energy we’re looking at geothermal systems, ⁓ energy storage systems and these while they have a high cost of investment over the span of five, ten, fifteen years we often see payback in terms of utility bill savings.

Cody Crabb (12:01)
Wow,

okay, so that’s good. That’s something to keep an eye out for for sure. Because I know that ⁓ lots of people or developers and things are having to kind of wrestle with what’s the best move because some things are probably going to be outlawed in the next kind of nearish future and they need to make sure they’re balancing it out. So that’s something really to keep an eye out for. Do you have any specific advice on that? Like don’t upgrade your stuff yet or like, you know what I mean? Like is there a…

window here where we should probably just pause until the new stuff comes out.

Tristan Rodewald (12:32)
I wouldn’t say pause and there are definitely protections for like if you were to install a system today and then like let’s just say you know we use the term outlawed or you know we want to update. They’re typically you know grandfather clauses like you know there are still pieces of equipment out there from the 60s which is amazing. ⁓ I tell my customers the new stuff won’t work that long but it’s allowed to be there. I’d say the main consideration is what do you want out of your building. Do you want it to be healthy 20 or

30

years down the line. think ⁓ concerning trend is like we build up buildings really quickly, ⁓ know, using kind of cheaper materials. It’s like if we want to preserve longevity, it means having a good system to start and properly maintaining it.

Cody Crabb (13:19)
Okay, what’s a what is a maintenance step that you often see people neglect? That’s like a you know what I mean like you go in and there’s like someone they did the thing again You know what I mean?

Tristan Rodewald (13:30)
not cleaning your coils, not changing the filters. And not changing the filters is something that applies for just you and your own house. ⁓ When filters get dirty, the fan has to work extra hard. That’s like more electricity going to that fan. The cold air is not being delivered properly. You’re getting dust and stuff in your space. ⁓ There’s a lot of research that shows that having clean, you know, good quality air actually improves, you know, student performance, you know, at schools, like work performance.

you know, it’s just it leads to a lot healthier lifestyle. But coil cleaning especially. You’d be surprised when you go, you show up, you go climb on a roof, you look at these coils and they’re just filthy. That’s not good for the equipment. The heat transfer suffers considerably and you know, you’re gonna, one, be spending more money to get a less comfortable environment, which just grinds my gears.

Cody Crabb (14:22)
I would imagine so yeah, and I think so that seems like just such a simple thing how like how often should someone check for check for that like six months quarterly, okay, yeah

Tristan Rodewald (14:30)
Quarterly. Quarterly,

yeah. Yeah. Pretty much, and this is something that you, like I said, if you haven’t called someone yet, please do. There’s going to be tons of service contractors in your area. Oftentimes, original equipment manufacturers will provide, you know, IOMs that’ll just kind of detail pretty much the exact maintenance requirement. ⁓ Some people elect to have their own staff on property, like property management companies are…

know, groups that have their own management staff. Just make sure that they have all that material.

Everyone’s pretty good about putting out what should be done to at least maintain the equipment. ⁓ In terms of what I talked about earlier, control strategies, stuff like that, that someone you want to call your service contractor about.

Cody Crabb (15:58)
Cool, okay, so we’re winding it down a little bit here at the end. Thanks so much for all you’ve shared with us so far. It’s really important information. ⁓ So I’d be curious, ⁓ we ⁓ cater mostly to real estate investors, right? So let’s say someone is looking into a property and they’re looking to buy it. What is an HVAC red flag? I’d love maybe a couple if you have them. Watch for these things.

Tristan Rodewald (16:26)
I would say, mean, first of all, walk around and look at the, whatever the piece of equipment that’s going to be sitting outside. ⁓

Look most manufacturers you look at the serial number There’s going to be one digit and then digits two and three will correspond to a year so if you see like a B84 that means that that thing was manufactured in 1984 that means it’s probably overdue for replacement. That’s a significant investment Now that’ll probably be priced into the property. It’s just something to keep in mind You know these older systems do have to be replaced eventually I would look out for you know if it’s a ducted system make sure the ducted

just clean. lot of the early on we saw the insulation inside the ductwork which led to mold, stuff like that. I would just do a very thorough check. I would bring in an expert to come through and kind of take a look and say, this is all maintained. Hey, this is looking good because the worst case scenario is we got a situation where moisture is accumulated in, we call it the plenum. It’s that area between the ceiling and where a lot of that equipment that

ductwork is placed. Moisture accumulation can happen because either like I said the coils weren’t clean so it’s not operating as efficiently, it’s not driving down that dew point or pulling that moisture out of the air. ⁓ Or even if ⁓ the fan’s going too hard and it’s shaken that ductwork we could see, I’m still not sure why, but if there’s a bunch of ⁓ vibrations in the ductwork it could lead to moisture collecting on it and that means

mold, that means smells. I would definitely look out for smells. I would look out for dust. would take a look above those ceiling panels. A lot of people don’t think they do it. You should see a little blue dot or a little yellow dot. That’s typical where we put a lot of the equipment. You should see it on the ceiling panels. Take a look at the equipment outside. Take a look in the ceiling and keep your eyes and your nose open.

Cody Crabb (18:23)
Gotcha.

Honestly,

that’s really, really good information, because I feel like a lot of people, there’s so much to think about when you’re buying a new property, that’s something that sounds like it could be really consequential. mean, you’re having to replace a massive system. I mean, that could be make or break, depending on what your margins are. So, this is super important to keep in mind. Tristan, thank you so much for joining us today and for all you’ve shared. If people want to connect with you, how can they do that?

Tristan Rodewald (18:59)
I would just say plug my LinkedIn. Tristan Rodewald on the LinkedIn. Happy to connect. Talk to whoever. Just kind of see where you’re at, what your considerations are. I’m happy to help. I like doing this stuff pro bono a lot of the time as well as part of my profession. I can’t shut up about it. That’s why I’m on the podcast and I just appreciate the opportunity to come on.

Cody Crabb (19:17)
Well, we love

people who can’t shut up about stuff. Tristan, thank you so much. Go connect with him on LinkedIn if you’ve got questions. It sounds like he’d love to hear from you. Listeners, if you liked what you heard today, go ahead and hit subscribe so you can get notified when we have a new episode. And we will see you next week on Real Estate Pros. Bye, everybody.