San Antonio Duplex w/ common water meter...thoughts?

Question

I analyzed and offered on a duplex today.

I noticed in the MLS summary that it has a common water meter for the property.  I did some reading on BP and it seems it is rather common for the landlord to pay the water bill in SA.  I'm not under contract yet, and I will obviously have the opportunity to review the current leases to see if its factored in the rent somehow, but how do other landlords account for this bill?  The thought of paying someone else's water bill frightens me since they have zero incentive conserve water.

I suppose i could sub-meter, but that can be costly and then i become a meter-reader (not interested).

I'm afraid I did not account for paying the water bill in my analysis...it would hurt cash flow some, but i would still be positive...just wouldn't hit the ROI i require.  My gut says to turn it back on the tenant somehow...but how?

Thanks,

Jason Hirko · Answer

@Miles Stanley there's plenty of deals on the MLS - just have to be willing to look

Miles Stanley · Answer

@Seth Teel Thanks Seth, i do a lot of work with SAWS and i think its BS that they will charge another impact fee to sub-meter since no additional water demands are being generated and the impact fee for the property would have been paid when the subdivision was platted or developed.  Just another way to gouge the customer...

@Rick Pozos I am not relying solely on MLS for leads, but i have seen several come through... they don't sit for long obviously.  I have sent a few letters and tried driving for $$$, i hope to ramp this method up in the coming weeks.

Rick Pozos · Answer

Same here. I have a mixed use property, 3 res. and 2 comm. Water is right around $40 to $50 per residential unit and about $20 per month per commercial unit.

I have not bought a deal on the MLS in about 4 years. You gotta do your own marketing. That is where the deals will be found.

Seth Teel · Answer

This is pretty much a non-issue. I have had rental property here in SA for the last 4.5 years including a couple duplexes with common meters.  When we first bought the property, we looked into getting separate meters.  SAWS wont sub-meter, and installation of a second meter meant $3500 impact fee + the cost of the new waterline & meter.  Total cost estimate was around $8000. There was no ROI on this improvement and added absolutely zero to the property value.  We decided to just add the water cost to our calcs.   The highest monthly water bill we have ever had for single unit is $56.

Ian R. · Answer

Correction...call SAWS (not CPS).

Ian R. · Answer

Can you just factor in what you believe the water bill will be and roll it into the rent?  For example, if you anticipate that the water bill will be $50 per month, per unit, then just increase the rent by $50 ($850 per month, instead of $800).  You probably won't get the exact $ amount but as long as you get close, you won't be out of pocket the whole amount and it won't significantly hurt your ROI. Call CPS and see what the average bill was for the last 12 months.  That should give you a pretty solid number to work with.  And your future tenants will likely never know that they're really paying the bill, not you.  Just an idea.

Kim Meredith Hampton · Answer

First thought is to sub meter, but if that is not feasible, you could put in the lease agreement with a clause that states that you will cover the water bill up to Xxxx, if it goes over that, then they would be responsible for the balance. This way they are also more apt to let you know if there is a leak.

I had a house a couple of years ago that an investor purchased that had been divided into a 2 unit duplex, it was a real hassle to submeter