Separate Heat and Hot Water in The Bronx

22 Replies

Hello all. I am begining my search for my first investment. I'm looking for a 3 family with a rentable basement or a 4 family, owner occupied in The Bronx. My main question is about how the utilities should be set up. I'm sure there should at least be separate meters for the electric but I'm not too sure about the heat, hot water, city water, and cooking gas. I would assume if there aren't already separate meters in place for cooking gas that that should be easy to add. I'm pretty sure that it's very uncommon (or non-existent) for small multifamily houses in the Bronx to have separate water meters for each apartment. Adding separate heat and hot water is a lot more complex. If anyone is very familiar with the Bronx rentals, can I get away with charging tenants for their own heat and hot water? Also, if I come across a property with one boiler/furnace and one water heater, should that be a deciding factor in making a decision to purchase? Also, does anyone have any info or experience on separating heat and hot water to each tenant? Any input on oil vs gas heat and hot water, and the conversion of oil to gas? Thanks in advance. 

@Chris Rosenberg

You are spot on: you do want separate utilities meters for both gas and electric. I am not sure how NY does but in Massachusetts, you can only request meters (gas and electric) if the house if an official multifamily, i.e. if you are renting your basement but that's not a legal apartment, you will not be able to separate the utilities.

Water meters, on the other hand, are usually common for the entire property and you, as the landlord, are in the hook for it.

Hope this helps...

Flavio

@Flavio Zanetti

Yes that helps Flavio. So as far as gas goes, that's cooking gas and also gas for each separate boiler and water heater that the tenant can be charged for? 

@Flavio Zanetti

Yes I agree. I'm seeing some properties with a hefty fuel oil expense and I'm trying to figure out what the solution is to lower the bill. I'm guessing that you can't charge tenants for separate oil heat and hot water if there is only one oil storage tank on site, even if I were to get separate heaters and alter the piping? Any experience doing an oil to gas conversion? It seems like, as long as there is gas supply on the block, you just need to run a gas line from the street to the basement and change the heaters. Costly up front but will save money in the long run. 

I have a three family in Brooklyn that does not have separate heat. Ideally you would have separate heat but I think that is close to a six figure job. I have a real good thread from Brownstoner that discusses the issue. Will dig it up.

We have gas. The past winters have been bad and we have lousy windows so, around $800 a month. I turn up the heat just so the tenants won't complain. I have a level payment plan also.  Water bill is 220 a quarter. But, I am about to upgrade the windows so, hopefully, the heat bill will go down.

I would also say that tenants can be a pain and complain about heat being too high or too low so ideally they control their own heat. If it is not too intrusive/expensive to separate the heat, I would do it. I think the best time to do it is before the tenants come in.

@Les Jean-Pierre

Yes it seems like separate heat is the way to go. I'm guessing you have a boiler that sends hot water to the radiators and also heats the domestic water (sinks and showers)?

Exactly. But, if you want to separate out the heat and have tenants, how would one go about this? I think the place would have to be vacant and only deep pocketed landlords can afford that. Also, local utilities have incentives to convert to gas heat.

Yes that is definitely the key question. How would someone separate the heat and hot water and how costly would it be?

I never separated the heat/hw. I should note that I got some energy upgrades from the state for a highly discounted price. It helped. My heating plumber told me it might make sense to convert each unit to electric heat(that is separately metered) and go that route. The ground floor unit is a store and the tenants put in one of those box HVAC devices you see on the side of buildings. Their lease will end soon so I was advised to take out their radiators when they vacate. I asked a plumber about separate water and he said each unit would have to have their own piping. I think ultimately, i will have to shut down the building and reconfigure everything.

I just had a thought about those mini splits. Maybe they would be effective but I don't really know anyone who has used them(I am not on good terms with the ground floor tenant).

So I did end up buying a 3 family in the Bronx in Morris Park. One boiler for the whole house with baseboard heat. 3 separate electric and gas meters. The boiler is on the 1st floor meter which is the apt I live in. Now my issue is how do I get the boiler and water heater on a separate 4th meter so when I move out I can rent out my apt to a tenant and I can pay the heat. I was thinking of keeping it the way it is and just paying the gas portion of the bill for the 1st fl apt when I move out. If I do that I would be paying the heat and hot water for everyone, which is what I have to do anyway, but I will also be paying for the 1st fl cooking gas which I don’t think is a big deal. In return, the 1st fl tenant will pay their own electric including electric for the boiler and water heater which shouldn’t be much money. What do you think?

As far as mini splits go, they are popular in my neighborhood. An HVAC contractor told me it was a good solution and does provide enough heat for the winter but I’m not totally sure if it does. But that’s probably a reasonable solution for dividing the heat for the tenants to pay, without changing piping and adding boilers, etc. Its way cheaper to install 3 mini splits than it is to repipe and install 3 new boilers. 

Also, I have 3 zones on my boiler. One for each floor and each floor has its own thermostat. The boiler only comes on from the main floor thermostat, but the other 2 stats control temp of their floors while the boiler is running. 

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you