Need advice: What type of HVAC system & capacity to install, 3-bedroom house

is there such a thing as a central HVAC UNIT THAT IS ALSO A HEAT PUMP? Seems like I recall seeing a previous note on here that perhaps BOSCH was developing one?

Since you are legally converting this building to a two family, much would depend on where you live and if you were one of the residents. Who is paying for heating? What is your return on equipment investment? How do your choices affect resale value? Can you repair this stuff yourself when it breaks down on Christmas Eve and your tenants are cold?

I've run apartments for decades, and my tenants never lost more than a couple of hours of heat. I do my own maintenance and most of the equipment will last for thirty or more years. I stock all the parts I'll ever need. It's all about quality of life when you are in the rental business.

When you're a landlord, economics, service life and dependability rule your choices.

@ethicalpaul indicates "For your domestic hot water, do not install an indirect." and I will disagree with this every time he says it. Sorry Paul

There are conventional water heaters that are connected to chimney vents to exhaust the unwanted fumes and byproducts of combustion. This is where I will start because this is a very common gas water heater and is usually the least expensive water heater to install.

1. Water tank is usually insulated with 1" of fiberglass between the tank and the outer metal jacket
2. There is a BIG air hole in the bottom of the tank to let air in to the combustion chamber so the gas can mix with air and burn
3. There is a hole in the center of the tank to let the fumes and byproducts of combustion travel thru the tank in order to exchange heat from the flame thru the metal hole in the middle to the water inside the tank.
4. There is a pipe that connects the hole in the center of the tank to the chimney. That connector pipe takes the byproducts of combustion and lets them exit the home to the outdoors so you don't get sick or die from breathing those fumes.  

Now that is all well and good but that particular design of heating water is not very efficient while it is burning (about 68 to 72% combustion efficiency) but there is another bigger loss of energy with that tank system. You see, that burner is not operating 24 hours a day.   It may only operate about 2 hours a day when the home is occupied and the residneeta are taking showers and washing dishes and the like.   If you are out of town for several days, the tank will operate the burner up to 30 minutes a day just to keep the water in the tank hot enough to take a shower whenever you happen to come home.  

The other 22 hours of each day, all those holes in the tank are still connected to the chimney, even when the burner is not operating.   And when the tank contains 120° to 130° water, and all those air holes are connected to that chimney,  that hot water will exchange in the opposite directions as cool basement air gets sucked into the BIG hole in the bottom and leaves a little warmer by the time it reaches the chimney. Stand by loss is greatest in that type of water heater, and causes the water temperature to drop so the burner must run for 5 to 10 minutes every 4 to 6 hours each day just to make sure the tank has that 130° water in case you decide the you want a shower at 3:00 AM or at 12:45 PM  or you want to do a load ow hot water laundry on any given tuesday. 

So lowest cost water heater = highest waste of fuel.   

So pay a little more for less waste, Right?

Now there are tanks that use electricity that do not connect to a vent pipe so they have lower standby loss. The problem is that in most places, Electric rates are so much higher than gas, that it is less expensive to buy a cheap gas automatic water heater and waste fuel.   There are other electric water heaters that do not vent.  The heat pump water heaters, still not perfected in my opinion.  There are also on demand water heaters that use an enormous amount of electricity for the time that the water is being used, then turn off as soon as the faucet or tap is closed and the water stops flowing.   That means there is no storage tank to have any standby loss.   There are also on demand (called tankless) gas water heaters that eliminate the stand by loss problem because there is no water stored in a tank to have that standby loss.  

There are other, more efficient tank type water heaters that cost more for all the features that make them more efficient.  Just variations on the same vented tank theme.   

Now we come to the indirect.   If you are purchasing a high efficiency gas boiler that is large enough to heat your home, say 70,000 BTU input, and you connect that super efficient burner to a zone that is connected to a water tank that has no vent (one of the big plus features of electric water heaters) you end up with a very efficient burner (much more efficient that the lower price Gas automatic water tank that operates as low as 68% combustion efficiency and has all that venting for increased stand by loss). Now you are making hot water more efficiently than any other gas water heater, and at a much lower cost than an electric water heater of any type.  

After making that hot water faster because the burner is larger than the typical gas automatic water heater, and more efficiently that the inexpensive burner in that vented water heater tank, you get to store that hot water in a tank that has a much longer warranty, much longer life expectancy, much better insulation to keep that heat from escaping, and will stay hot for up to 20 hours before needing the burner to charge that tank with more heat as a result of the standby loss.  

Like Paul, I like to prove my point, but I didn't have the luxury of video back in the day.  I used electric timers that clocked the time electricity was powering a circulator or a gas valve or an oil burner.  These timers indicated that my buderus 30 gallon indirect, When the home was unoccupied, would not call for recovering from stand by loss for as long as 20 hours on some days.  So I believe that the indirect is one of the most efficient ways to heat water and store hot water compared to any other tank system, and is better at providing faster recovery when using hot water. And I like it better than instant / tankless water heaters.  

I do agree with Paul that it is not a good idea to purchase an indirect water heater in some cases.  Let's say you have an old coal converted boiler with an inefficient conversion burner.  A Gas automatic 40 gallon tank water heater would be the better choice.  You don't want to crank up that dinosaur in the middle of the summer with its total combustion efficiency of less that 50%, just to heat up 30 gallons of hot water.  That would be a bad idea.       

So all in all, Paul is pretty smart.  I just disagree about indirect water tanks.  They are IMHO a great source of domestic hot water. 

it would be good if the forum software closed threads after a couple years

Yes, maintain temp in the indirect, but you have to heat up the boiler to do that.

What do you base your opinion of HPWH on, Ed?

I, an unskilled homeowner, installed mine 5+ years ago and it is still running great on very little electricity.

Electric is better at holding heat but with higher operating cost.

How much higher? We know resistive electric is 100% efficient at putting heat into the water tank. Gas, as the other Ed mentioned above is constantly losing heat up the chimney, even when it's not running at 83% or whatever.