Adding water meters to multifamily

[Simon Hernandez]

Hello, everyone. I'm looking at a 5 unit multifamily with a master water meter. Have any of y'all split the meters and, if so, how involved of an undertaking is it? 

[Nick Schoch]

This is called submetering. Google searching using this term yields a bunch of relevant articles and companies that can help.

You will be installing water meters on each of the units, which will require accessing the water line somewhere between after it splits off from the main and before it branches within each unit. This may not be obvious and may require some investigation. Ideally, you'll have an obvious water shutoff for each unit that allows you to insert an in-line meter. You will want to discuss the best approach for billing with the local water utility. They may require specific meters that allow for things like remote reading.

As an investor, I would ask a couple of questions:

1. How long will it take for the increased cash flow to cover the cost of implementing individual metering?
2. Will your rental rates stay the same if residents compare your property to competing properties? Will tenants consider the incremental cost for water?

Economic theory would suggest that rational tenants would factor in the individual billing for water when comparing properties to rent. If this were true, there might not be any benefit to individual billing. However, we know that tenants are not always rational!