im looking at a small duplex thats for sale, deal looks good except the current landlord pays utilities because they are not seperatly metered.
have you ever had to get units seperatly metered for gas, electricity and water? is it possible? just curious what did it cost you?
Check FIRST if rentals for the area it is common to include utilities in the rent charged per month.
If all landlords are doing it then you can waste money separating out as the tenants will move down the street.
If landlords separate out utilities and is common for the area then move to the next step. You will have to check on all that is involved for separating out. Optimally you want the tenants to have a direct connection and bill to the utility company. If not then having a sub-meter company is an option for billing tenants and collection.
With a 2 unit all of that may not be practical. It is true that utility usage is about 25 to 30% higher when the landlord pays for it and includes it in the rent.
It may be cost prohibitive to separate out the utilities.
Usually this is more involved then just the cost to add an electric or water meter.
Actually you will need three meters, one for each unit and the house meter. The house meter is for consumption not specific to the individual units...such as exterior lights, power to the washer and dryer, sprinkler system, outside hosebib etc...
If existing water lines are behind walls, under slab, it is going to be impossible.
Also, if you separate electric but not water, and your water heater is electric, make sure you are not supplying hot water to unit B on a branch of a line powered by unit A's electric.
Electric and gas usually are the easy ones to do properly. With water, you only have one shut-off valve at the curb, so if one tenant doesn't pay the water company shut things off at the curb - affecting both.
And for any utility that must be shared due to common area / common access, you will need that third landlord account as well.
I'm also curious to know if the other duplexes in the area have separate utilities. I find that usually the gas/electric are separated and the water isn't. If all the other properties are separated and just this one isn't, I'd say pass. Like Joel mentioned above, doesn't seem practical on a duplex.
Was it built as a duplex or converted? Often I see converted duplexes are the ones with wacky utility separations because of the setup of the furnace etc.
@Isaac Essex We have a duplex in which the electric is metered separately but the water isn't. Also, in our city, the water cannot be changed out of the owners name, so the owner/landlord has to pay the water bill and is solely responsible for it anyway. So I just averaged the amount of the water bill and increased the rent to cover it. In our area, it is common to include certain utilities in the rent, so it is not an issue.
FWIW, Serge Shukhat discussed this in some detail on podcast 060.
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