I am planning to add another floor to my house and obviously will have to involve professional engineer to finalize the design but right now I am just trying to get ideas on stuff I would like to do. Since the plan is to have this 2nd floor addition as rental apartment I am hoping to have separate HVAC system for this section. Is it possible to put furnace in the attic? The attic will be unfinished but I could make small room for furnace/hot water tank to insulate it and minimize the heat loss. Also the ducts/water pipes would have to be insulated since they would be located in the attic as well. Another challenge in this case I think would be running A/C tubing from the outside unit (which would be on the ground level outside the house) all the way up so the length would be much longer than usual install and would most likely require more insulating that regular install? I am also considering insulating between joists as the case would be with live in attic and maybe having couple of heating registeres there to make sure the temperature is kept above freezing. Doing this would give me separate heating controls for each section and I would not have to demolish the main floor to run ducts and water to the second level. What do you guys think about it?