Will electric heat become more economical?
Q: With the price of fuel oil at $2 per gallon and the likelihood of increases this winter, I am wondering at what point electric heat becomes more economical.
I have a rancher that is less than 1,000 square feet. We have been discussing putting electric baseboard heaters into our most used rooms, to supplement the oil furnace we have. Anyone we mention this to has flashbacks to when electricity was so expensive, but most people are comparing it with the old $1-per-gallon oil.
My electricity costs haven’t gone up in years. Wish I could say the same about filling my oil tank.
A: Remember, the electric companies also depend on oil to produce power, and as their costs rise, the difference will be passed along to you. (I once rented an apartment in a building in which the owner converted from natural gas to electric baseboard heat. The monthly bill tripled and we were still cold.)
If you’re worried about fuel-oil prices, there are alternatives. Some suppliers offer contracts to regular customers that allow them to lock in a certain price for a certain amount of oil before heating season arrives. That means if you signed up at $2 a gallon and the price rose to $4, you’d still pay only $2. Just read the contract carefully to be sure there is no hidden price-escalation clause.
There also are fuel cooperatives, such as the one run by the Pennsylvania Public Interest Research Group, which has 1,100 members locally. Using the collective buying power of that many users, the co-op negotiates prices based on the daily wholesale price of oil that can save members up to $200 a year. I belonged to the group for several years, when I lived in a house with an oil furnace. In the winter of 2000-01, for example, we paid $1.06 a gallon when the retail price was $1.42.
There is an annual membership fee. For more information, call 215-893-3835.
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Q: We are a 66- and 65-year-old couple. We live in a 75-year-old twin, three-story house. The mortgage is paid, and we believe the house to have a market value of about $200,000 to $250,000. We are trying to decide on our next residence — which would be our last home.
We would be happy living in a condo in downtown Philadelphia, and we have begun to look into this type of investment. We got some books on the subject, but after all our reading we are afraid to select this because it seems like we will be at the mercy of a condo association’s rules and regulations.
In addition, we can’t understand the cost of a condo, nor exactly what we are purchasing. There is the advertised price for the condo, as well as the association fees. It seems we are buying our unit and part of the building, as well as any liabilities incurred by the association.
A: As a condo owner, you hold title to the unit only. But you share common areas with the other owners, so you are responsible for the land, the exterior of the buildings, hallways, roofs and swimming pools. You pay property taxes on your unit. The condo association manages the complex and collects fees from all the owners to maintain the common areas.
Everything in life has a tradeoff. Condo buyers don’t have to worry about mowing the lawn or shoveling snow, and city buyers have all the advantages of modern urban life — restaurants and entertainment, convenient shopping, and the ability to get along without a car most of the time.
Condo associations are only as effective, benevolent or bossy as the majority makes them. If you are buying into an existing building, you should talk to the other owners to learn about the good, bad and ugly of the association. If you are buying into a new building, you have the opportunity to help shape how it will be governed and managed.
Shop around. Maybe condo living isn’t what you want. But if you move into an active-adult community in the suburbs, you’ll have to deal with a homeowners’ association, which also will charge fees and decide policy.