Estimating cost to submeter utilities
Hello all!
I'm curious to know if there are any rules of thumb or rough estimates for costs involved with submetering a building for utilities. The apartment building I'm conducting diligence on is an 8 unit in which utilities are currently included in the rents. I do need to do more review of the market to confirm if prospective tenants would accept the responsibility of paying for utilities, or if the market expectation is that utilities are included in the rent for the area.
However, this may be a moot point if it will be prohibitively expensive or cause massive headaches to even try to meter for gas and electric for each unit. While my uneducated opinion is that the building is in great shape, I'm also very cognizant of the fact that it's well over 150 years old, so who knows what happens when that work begins.
The current owner paid an average of $7100 per year in each of the past two years for gas and electric. Am I better off just trying to maximize the building's energy efficiency as much as possible, or is it worth trying to convert these expenses over to the tenants? This is one of the key points I'm focusing on as I would look to improve operations and increase the value of the property significantly if I am able to acquire it through slowly raising rents to market and putting the building under more professional management.
Thanks!
Mike