Property Manager · Groton, CT · Member since 2017 · 130 posts · 81 votes
We are currently leasing the office spaces in our building as gross leases. Mostly are target tenants are therapists and wellness practitioners; single office type business that utilize shared waiting rooms. The 2nd floor of our building isn't rent ready yet, but have had interest from a person who wishes to have a photography studio in there. Our concern is that our rent numbers are based on a 5-day per week standard office use (lights, computer, etc) and this will be significantly more electricity use. And of course, the building isn't wired for separate meters.
So in my head there are only two obvious conclusions: guess how much electricity they will use and set rent accordingly -or - meter or monitor their use somehow and charge them separately for the electricity.
There are a few circuit monitoring product's on the market for around $600 that seem feasible, has anyone used something like this?
Photography studios honestly aren't going to use that much more electricity. I thought the title of your post suggested cannabis cultivation! You could increase the rent by the difference in your electricity bill for the months going forward. Depends on how complicated you want your life. A meter takes someone coming on a monthly basis to check up on it and doing some math. I would try to average their electricity bill and charge them that every month on top of their rent. Focus your time on buying more real estate.
Photography studios honestly aren't going to use that much more electricity. I thought the title of your post suggested cannabis cultivation! You could increase the rent by the difference in your electricity bill for the months going forward. Depends on how complicated you want your life. A meter takes someone coming on a monthly basis to check up on it and doing some math. I would try to average their electricity bill and charge them that every month on top of their rent. Focus your time on buying more real estate.
HAHAHA @David Friedman we're not quite to that point out here in CT where cannabis cultivations is game for legit commercial leases. Though there are a few around for the medical folks.
Another data point is my business partner / better half / wife is an owner occupant in this particular office building so checking the data wouldn't be that much of a chore. And the unit is WiFi enabled.
What about a three month probation time in the lease as an evaluation period? Basically it would allow me to monitor their use, then adjust the rent if needed?? Otherwise I have no data as to how much they will use. They operate out of a home space currently so no previously rented spaces. Though I could ask them I suppose.
I like the idea of a probation period. It seems like the most fair option to you and the tenant.
But seriously, focus on buying more real estate and less on electricity hahaha.
Cannabis cultivation is starting to ramp up in California. The rent you can charge is sky high for those tenants. Might want to position yourself in your area for legalization. Talk to the wife first of course haha.
David Friedman
I'm with you...I feel like half the posts here looking for advice could be answered with, "Go buy another 50 units so you can truly understand what's an issue and what's not."
It actually prevents me from replying oftentimes.
So many people are passing over dollars to grab dimes.