Should I get a 4th meter on my triplex?

Question

I bought my first triplex in Luck, WI 1 1/2 years ago.  Each unit is metered separately which is great!  However, I am the only one that has access to the basement (this is where all the utilities are).  In the winter I run a small heater to keep the pipes from freezing and in the summer I run a dehumidifier.  In the basement, I have the option of plugging into either unit 1, 2 or 3's outlets.  I worked out a deal with unit 2 to use theirs and I compensated them a set amount to run my heater and dehumidifier.  I got a quote from my electrician and it would cost $4,700 to install a 4th meter.  I feel like I have 3 options:  Get the 4th meter installed, include electric in unit 2's rent going forward OR work out another deal with the new tenant that moves in?  I'd appreciate your thoughts on this.  Thank you.

Caroline Gerardo · Answer

How long are you going to hold this? 4700 divided by the number of months? It's a capital improvement but expensive with no bang for the buck.

Richard F. · Answer

Aloha,

You can probably just get an Electric Meter Socket to monitor the actual usage on whichever outlet you utilize, then "read" it on a regular basis, crediting your Tenant the actual usage cost.

See if one of these would solve your issue:

https://www.amazon.com/Best-Se...

Be sure to prepare an Addendum to the Rental Agreement to document the details of how and when you will determine the charges.

Andre Taylor · Answer

$4700 investment. What do you gain from it? Time, extra income, etc? I would weigh those options out.

Liana Hedberg · Answer

I don't consider it a large amount of money in general but for this property it seems like it might be overkill to install a 4th meter to run a small heater in the winter and a dehumidifier in the summer.  I'm just trying to make wise choices with my money as I get started. Trying to find out what's necessary and what's not.  I want to do things the correct way but not spend my money foolishly.

David M. · Answer

@Liana Hedberg

Your welcome!  Is there anything else that you may run?  Just checking if any other common electric usage.  I suppose if anything else its not on a 4th panel.

And don't forget, the longer you hold, the lower the monthly cost.  Meanwhile, you should be able to take deduction this year (assuming you have a net profit to offset).

And yes, I can't imagine for my >20yr of landlording having to work this out with a tenant for that long.  Good luck.

David M. · Answer

@Travis Johnson

SORRY.  This is what happens doing mental math while tapping away.  :(

But, at least you certainly get the idea. Sorry.

David M. · Answer

@Liana Hedberg

Agree with the above.  Figure out what is it really costing you.  If you plan on holding for another 10 years, for example, its really only ~$4/mo so you don't have the issue with working it out with one of your tenants.  Assuming you have the funds for the install, its a small price to pay to not have to worry about working out a deal with a tenant.

Or, put another way.  If you purchased your own local meter to give a better estimate of the kWh used to compensate the bill with the tenant, this ~$4/mo should be noise assuming you have a variable electric rate.

Personally, I'd do it because its worth simplifying things to me, especially depending on how/when you compensate that tenant.

Hope that helps.  Good luck.

Allan C. · Answer

@Liana Hedberg I suggest trying to do some math so you understand the trade offs. When you get comfortable using numbers to guide your decisions, you will have more confidence with investment decisions.

From my vantage point, I don’t see installing a new meter making economic sense. You will never recover that investment, so pursue options to reimburse tenant for the power use.

Theresa Harris · Answer

I'd work out a deal with the new tenant or simply put it in as part of their lease.

Should I get a 4th meter on my triplex?

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