How to charge for utilities when property online has one meter?

Question

I just purchased a property that was a duplex at one time and I'm converting it back to rent to two tenants. What are some good ways to bill/charge for a property that isn't metered for each individual unit? Should I just include utilities in the cost of rent? If so, how should I go about determining what to charge?

Joe Splitrock · Answer

@Joe Frey you have to be careful because just splitting at some arbitrary value will not be accurate and could easily violate local laws. In my opinion it is best to include the costs in the rent if you cannot meter separately. You do need to be careful to make sure tenants are not wasteful. For example, I had a tenant that I paid gas for and went by her place in the dead of winter to find windows open. She told me it got hot in there.

Dillon Loomis · Answer

@Joe Frey it can be rather expensive to submeter. You can look into RUBS (ratio utility billing systems) to charge each unit for their individual usage based on various factors.

The easiest thing, without knowing the details, would be to include the utilities in the rent. You can speak to the previous landlord, the utility company, other check with other PM (property management) companies in the area to get estimates on the average monthly or annual utility bills in the area/neighborhood and go from there.

Joe Frey · Answer

Thanks Kim B. suggestion to include the utilities in the rent.

Joe Frey · Answer

Perfect! Thanks @Dave Reese and @Dillon Loomis so much for your input!

Jassem A. · Answer

Another option would be to rent both units to a single tenant/extended family and have them figure out how they want to pay the utilities among themselves

Joe Frey · Answer

Thanks for the reply @Roy N. I was quoted several thousand dollars to re-wire the property 'split' the power, so I didn't really want to spend the cash. However if it's going to make things easy and save me both money and time, I'll make it happen. I was just wondering if other people have addressed this in another way without having to split the utilities. Make sense?

Roy N. · Answer

@Joe Frey

If you are redividing the property into two units, why not simply put separate electrical and, if present, gas entrances into the second unit?   This is the time to separate things and make your life simpler in the longer term.

How to charge for utilities when property online has one meter?

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