Switching to tenant paid utilities in Phoenix

5 Replies

Hey all,

We have a recently acquired 16 unit complex in Phoenix, Arizona that has historically had owner paid utilities. This is the standard for properties like ours in the area, and our PM said he hasn't seen anyone set up RUBS. Is it worth attempting to switch to tenant paid utilities? If so, what is the best strategy to make the switch in an area where it's uncommon? Thanks!

Define utilities?

I find it very common for tenants to pay electric and gas but landlord supplies water/sewer/trash. I am familiar with rubs but haven't seen anyone implement it. Based on my experience with tenants, paying all utilities wouldn't be an issue, the question would be how long would it take you to recover the cost of implementation?

I have one building in Tempe where tenants pay water because it is individually metered, and another building where it's not so I pay.

Tenants don't seem to care or say anything about it when signing the lease.

What is the cost to implement? When would it get paid back? Or just take the whole water bill, divide by 16, and raise rent by that much on new leases.

Which brings me to another idea... has anyone billed individually for a portion of the water used by the building? I haven't heard of anyone doing that before.

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@Dick Rosen - tenants currently pay cable and electricity, we pay water and trash. Thanks for your feedback, sounds like we would need to calculate cost of implementation and time to recover. 

@Denny Robert - I like the idea of just raising the rent proportionate to the water bill divided by 16, but have heard that owner paid water can lead to excessive water use and a disregard for fixing things like leaky faucets, because the tenants aren't paying. Have you experienced this at all? Does a ~$1,000/month water bill for 16 units + laundry seem reasonable?

@Account Closed - thanks for your input, will do if we make the switch.

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