Does Metering a Property Increase or Decrease Flexibility?

2 Replies

I have a question, which I have yet to find an answer to in the forums. Although I'm sure after writing that statement, someone will share a link to a forum thread that I have yet to discover. (If you find this, please share!)

I am preparing to build a duplex and would like to build basement apartments (ADUs) on each side. So from a rental perspective, it's 4 units. My initial thought and gut says to separately meter everything, as every time I buy a multi-family property, I separately meter it if this isn't already done. 

The reason for this slight hesitation is that I always look at multiple exit strategies. This property is located in a resort area of Colorado. While my primary plan is to long term rent these units (minus keeping one for my family to use.) I may at some point sell one side off if market dynamics shift in a way that would make more sense for me to sell versus hold. 

Thinking about this from a potential purchaser perspective, purchasing a property that has the main two levels metered separately from the basement could be a positive to someone with an investment mindset...but someone that just wants a vacation property and wants to use the whole property might find this annoying to have two separate bills. (NOTE: The buyer base for this area could be another investor, but more than likely it would be someone looking for a ski/2nd home.)

While I can't account for everyone and am currently of the mindset that I will meter all "units" (pending any influential feedback here in the forums), I'm curious if anyone has any thoughts on pro's and con's to metering everything into 4 units or just metering each legal side (into 2 units) and splitting the upper and lower utility payments based on some other criteria (e.g. square footage). Also note, the metering of water/sewer/etc. costs $15,000 per unit.

Thanks in advance for your thoughts.

Mike

It is simple to make provisions for a master meter and submeters at the time of construction. You can have a master meter connection point installed for water and sewer, and then jumpered while not being used. Later on, if/when you want to have a single point of use, you install a meter in the master spot and jumper or abandon the submeters. 

Great tip @JD Martin , I didn't realize you could have a master meter connection point and install and/or abandon submeters when/where relevant. I will connect with my local utility companies on this approach. 

Cheers!

Mike