Northeastern Pennsylvania · Member since 2025 · 44 posts · 18 votes
Hi ~ when running numbers on small multi families ( considering to buy ) ~ often utilities costs are missing from listing, and seller is often not at showing ~ agents don't know and don't seem interested in finding out. Are there rules of thumb to estimate these costs ?
@Kevin Carpenter When you view the property and if tenants are there, you can also ask them how much they pay, which is usually pretty informative. Also ask tenants if there are any recurring issues.
Typically when completing the due diligence, you'll have a chance to see the current Sch E, which will list utilities if the owner is paying anything. For my multi unit, I'm required to pay for garbage removal, for example.
Majority of multi family is separately metered so the tenants pay utilities. If the place is a converted single family or a section 8 lease then you would eat that cost. I would target separately metered properties. It ranges on costs, owners should know utilities if they pay that.
@Kevin Carpenter When you view the property and if tenants are there, you can also ask them how much they pay, which is usually pretty informative. Also ask tenants if there are any recurring issues.
Typically when completing the due diligence, you'll have a chance to see the current Sch E, which will list utilities if the owner is paying anything. For my multi unit, I'm required to pay for garbage removal, for example.
Learn from the seller what is paid by landlord and what by the tenant. You may need to get it under contract before getting the answer about how much the landlord pays, but you absolutely need to do that and factor it into your underwriting.