Splitting Water bill. Even split or Water meters?

14 Replies

I have been trying to find an option to split the water meter on my four plex.  Currently it has one meter and bill that is shared.  How have people been doing this?  Are there companies that will do it?  I remember a podcast that mentioned it but I can't remember which.  

You can call your utility company and ask them to add individual meters to the building, however, last time I looked into that option, it was rather expensive.   You could install your own flow meter on each unit, then you would have to read it monthly and assign the bill accordingly.  Honestly, I just factor it into the rent.  Most of the quads in my area all include water as part of the rent.  I have on occasion threatened my tenants with water charges when the bill has been high, ie they didn't report a leaking toilet, which ran the bill up.

Good luck. 

Sean,

  I am not sure if you use a property management software, but the software I use a property management software called Appfolio.  Within this property management software it allows me to enter the amount  of the utility bill and it actually calculates each tenants portion based on the ration that I put in.  For instance on my properties that are all the same square foot, I have the 90% occupancy and 10% square footage.  It will actually take a count for each occupant in the unit and charge the tenants based on the date they moved in, and any prorated charges between bills.  

I took over managing a 20 unit apartment building in Norfolk and August of 13 the water was around $1300 a month,  Now that the tenants pay their portion of the bill the total bill last month August 14 was $798.00.  Not only are tenants actually conserving water, but they don't want their water bill to go up like it did in December and reported all units with unauthorized people living in the units.  I now have a very tight control over who comes and goes from that property just based on the tenants only wanting to pay their fair share.  

People doing this only think about the meter but they then miss something important. 

I was looking at a duplex where there were two water meters but only one shut-off valve at the curb. One of the tenants stopped paying their water bill; water company comes out and shuts off the water at the curb. The tenant who did pay was not happy with that.  

So make sure the utility company can do a shut off that doesn't have a side effect. 

@Sean Ploskina  What you are asking about is called RUBS (Ratio Utility Billing Services) and it is exactly what @Lisa Doud describes in her post. There are many companies that do this, although it might be cost prohibitive for just 4 units. You can do it yourself for that many units fairly simply, just decide on the equation variables and make sure you put how this is calculated in your lease under utility bill backs.  If you don't have this defined well and initialed by the tenants signing the lease, you will have no chance of getting a judgement on this amount if it came to this in court.

@Mike B. You Beat me to it! I am uncertain of the future of this system though- I think all it takes is for one tenant to radically challenge the "Fairness" of the system. It certainly helps neighbors keep one another accountable but even that at times can be troublesome.

There are several companies who will handle the billing for RUBS for you so it can be an automated system.

@Marcus Curtis  I agree with you that there are challenges on the way. I operate many units throughout Ohio, and there are pro tenant groups challenging many of the charges landlords are making their tenants pay in Columbus. Unfortunately, some of the operators in Columbus have some seriously ridiculous charges that are forcing this. I think it is one thing to charge a few bucks for pest control services each month, but they are charging upwards of $20 or more for these things. Those types of operators are going to screw it up for everyone if the courts side with the tenants.

On the flip side, I find RUBS completely fair and better than charging a flat fee (which means the landlord usually pays a larger portion). If the RUBS variables are based on occupancy, then you factor in everyone taking showers and flushing toilets and the additional loads of laundry. Where the process becomes unfair is when landlords do not keep accurate rent rolls with how many people live in each unit or they are not diligent in weeding out unauthorized inhabitants. That is when the equations get skewed and people end up paying an unfair amount while others pay less than they need to. It all boils down to how efficiently a property is managed.

I'm in Columbus, OH, and we use Guardian Water & Power to sub-meter our duplex. I think they charged ~$200 to set it up a few years ago. They read the meters, and send a bill to the tenants. There is a $4.60 charge per unit for the metering - it is rolled into each unit's bill. The tenants send us the monthly payment. The official water bill with the City is in my name - we receive that bill quarterly, and use the tenant funds to pay the bill. I pay Guardian the $4.60/unit monthly (again, from the tenant funds). I audit the City bill every quarter, and the Guardian reading is pretty spot on.

Yes; Guardian is the way to go. We manage 200 units here in Columbus and about 80% of our multi-family properties are set up with Guardian (I always recommend it to our clients). It works exactly as Pam describes. The other advantage of sub-metering is it allows you to quickly isolate and fix leaks (usually toilets) by looking at the usage and noting unusually high readings.

The City of Columbus only sends a bill every 3 months, and refuses to install more than 1 meter per property, no matter how many units. So it's almost required if you want to do anything other than roll it into the rent (which, in my opinion, does not fully recover the cost - tenants seem to discount/ignore that when price-shopping rents).

Defiantly don't want to go with an even split.

That will only lead to "he runs his water more than me"

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@Sean Ploskina  I had this dilemma on a couple triplexes. After running the numbers on all scenario's I did not find it to be worthwhile to individually meter the units as it was a huge capitol expense. Instead I just bumped rents above market, and then implemented a RUBS program varying price on occupants. I didn't want to install the meters via a service oriented company as I personally wouldn't have wanted to buy a building with a contract as such in place and feel it would limit the buying pool to investors who were okay with the idea of that. If your plan is a super long-term hold perhaps you can justify the price of the meters.

I've included it in the rent, and if you provide monthly pest control you can so inspections monthly.  We have it in the lease that if any unreported water leaks are found that there is a $50 fee assessed to their account.

Anything without it's own meter is very unprofessional. A smart tenant will avoid this property. A smart tenant will leave the water running when they are not happy. Including utilities in the rent is never a good idea, now it just makes your rent look higher in comparison to others.

Water meters only cost about $50-70 each. Each unit should have it's own individual water shut off also, this is an ideal place to install a meter.

Anything less makes you look like a slumlord.

@Sean Ploskina

Hi Sean

look into a company called NWP. I find it very interesting that Lisa's tenants are actually using less water because now they pay.  Studies have shown that consumption drops around 60% when tenants are responsible.  Great for the environment and the wallet

Gino

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