Most landlords still pay water/sewer/garbage in Sacramento. A lot of central Sacramento still doesn't have water meters, so it's an easy fixed cost to just build into the rent. Personally, I prefer doing that as those bills end up getting stuck to the property as compared to the tenant if they are left unpaid. With water meters slowly being turned on, charging water to the tenants is becoming more common; I've heard there ways to have the tenants direct billed for just the water portion.
As far as the best cities around Sacramento, I still prefer transitional neighborhoods in Sacramento itself. But that's partly because I'm too lazy to go out of town.
hi @matt smith! I'm curious to see how other investors in the area respond to your post. I have been searching for deals but very difficult to find properties that pass the 1% test. There are a couple areas (duplexes) in Sacramento that come close but still challenging because owners are required to pay garbage and sewer costs. Does anyone know if owners need to pay water as well? I think they do..
@Luis Silva I often see sewage/garbage/drainage and water as negotiable between the renter and landlord with higher quality properties, like lets say single family homes renting for 1600 and above. I've noticed though that small multifamilies, especially those that are of a lower asset class just charge the rental rate without an additional utilities fee. I just analyzed an 8 x 1br building @ market rents of 650/unit and none of the comparables charged additional utilities. I'm sure there are exceptions though.
Most landlords still pay water/sewer/garbage in Sacramento. A lot of central Sacramento still doesn't have water meters, so it's an easy fixed cost to just build into the rent. Personally, I prefer doing that as those bills end up getting stuck to the property as compared to the tenant if they are left unpaid. With water meters slowly being turned on, charging water to the tenants is becoming more common; I've heard there ways to have the tenants direct billed for just the water portion.
As far as the best cities around Sacramento, I still prefer transitional neighborhoods in Sacramento itself. But that's partly because I'm too lazy to go out of town.