RUBS/Submetering - El Paso Multifamily Purchase

[Max Weiss]

Hi All,

Looking to get some advise on a multifamily I am looking to purchase in El Paso Texas. Currently water gas and electric are all being paid by landlord. Cable is also being paid but that is separate. Rents seem fairly priced in line with market right now but there is definitely waste in the utilities. Wondering thoughts on best way to reduce this either through RUBS or submetering for these units. Alternatively can also reduce consumption with low flow, led lights etc if forced to pay some or all as landlord. It looks like many of the competing properties have some sort of concessions but not ALL ultilities AND Cable. Any advise is much appreciated.

[Kim Meredith Hampton]

Max,

Sub metering is expensive, and if the rents are already at market prices, may not be worth the cost. RUBS is extremely helpful to  offset the costs of utilities and get your tenants to save more when they have to pay more. When leases expire, pass along their portion of the RUBS if you think the market will bare this cost on top of the rent. 

On a side note, typically multi family properties with submetering, are worth more on the back side because it increases your NOI. Because of your situation, if you think you can work in the cost of sub metering, I would go that route