Houston, TX · Member since 2017 · 49 posts · 15 votes
I own a triplex. I live in the main house up front which has its own water and electric meter.
I have two small homes in the back that share a water and electric meter. How do I handle utilities for these homes since they share a meter?? Should I ask the two tenants to split the bills down the middle?? Who's name would the utilities be under? Do I put it in my name and have tenants pay me for the utilities? I'm so confused.
Flipper/Rehabber · Golden, CO · Member since 2013 · 590 posts · 319 votes
9y
I'm dealing with the same situation now. Decided to add it into the rent and have one flat rate. Too much hassle to split the bill and play bill collector every month in my opinion. Curious on others techniques as well.
Flipper/Rehabber · Golden, CO · Member since 2013 · 590 posts · 319 votes
9y
I'm dealing with the same situation now. Decided to add it into the rent and have one flat rate. Too much hassle to split the bill and play bill collector every month in my opinion. Curious on others techniques as well.
Flipper/Rehabber · Golden, CO · Member since 2013 · 590 posts · 319 votes
9y
@Account Closed splitting the meters isn't a cheap proposition, especially if the house shares circuits. Your talking a lot of rewiring and a hefty bill. Whats the roi on that? If for pure convenience, I cant see it being worth it unless you can split the units down and sell them individually in the future.
Investor · Monroe, WI · Member since 2015 · 691 posts · 610 votes
9y
I would take the average usage per the utility company, use that to determine what you think the monthly bill would be and then pad it some to account for using more than the average.
Forney, TX · Member since 2013 · 119 posts · 101 votes
9y
If you do not have the funds to separate the utility meters, then you have two options (which one is a PITA).
1. Each month when utility bills arrive separate the total by the number of tenants in each unit, then bill tenants. This is your option if tenants are already in the unit with a lease in place or....
2. Call utility and get a 12 month average on both meters and add this amount to rent for new tenants or a new lease. You will need to get a 12 month average each year so you are not paying a partial of their utilities.
Next time you purchase a rental make sure you have enough reserve funds to cover issues that are unforeseen. Good Luck!
In light of they fact that they have no history your only option is to have the utilities in your name and bill the tenants each month by splitting the costs. If you do not do this you will end up losing money. Once you have a history established over a couple of years you can then add it to the rent (plus a premium) for new tenants.
No other option, aside from separate meters, will work in your case. You should look into the cost of separate meters in the future.
Investor · Bayside, NY · Member since 2017 · 1k+ posts · 1k+ votes
9y
Depends on the type of tenants you have.
I had a co-worker who's somewhat a jerk. His landlord is similarly stupid. Cooking gas bills nowadays run about $20.00/month. He shares a gas meter with his landlord and the LL bills him 50% what's on the bill. And I hear him constantly bitching about various meals the LL cooks, the number of people living there, the guests coming etc. This compares to his simple life with his wife where they did little cooking. Says he complains about it to his LL.
So I asked him how much rents he pays, and he tells me $700.00. I know at the time rents run around $700 to $750.00 for his type of apartment. So one day I said, if the LL charges you $725/month including gas, it would save you the trouble of spying on him, counting the number of guests he has. He said, you're probably right.
My takes is I had rentals that does not have it's own utility meters, I told the tenants it's included in the rent, and just watch what you use. Saves all the trouble of billing them separately, following up on it, and arguing about it with the tenants.
Flipper/Rehabber · Sarasota, FL · Member since 2016 · 15 posts · 3 votes
9y
I just bought a duplex with the same problem, the previous owner had the tenants adding $50.00 to the rent each month to cover the water bill and had it billed to himself. I find this stupid because the utility company told me the average spent is $175.00 which is also an insane amount of water.
One of the duplex sides has 2 adults and 3 kids living in it and the other has 2 adults and 1 child so it's not fair to split the bill down the middle. I am just waiting out the leases to the end then putting up another water meter, that way new tenants will have a good set up, old tenants won't refuse to pay me bc of the clear increase in billing and the re sale value of my duplex will be better when I do decide to sell.
You'll never win with the tenants because they'll always argue they owe you less for utilities.
Flipper/Rehabber · Golden, CO · Member since 2013 · 590 posts · 319 votes
9y
@Ilona Davidovich I don't think it will be as simple as just putting up another water meter. Someone correct me if I'm wrong, but I believe you would need separate water service to each unit. Aka separate water taps, separate water lines, and completely separate plumbing. Thats not going to be cheap or simple..
Houston, TX · Member since 2017 · 49 posts · 15 votes
9y
for all those wondering I got a quote to do separate water meter and electric meter. It's not as simple as installing a "meter". You have to hire an electrician to rewire the whole house so the other unit has completely separate breaker box and electric lines. The cost to do this was quoted at $8,000
For water, you neeed completely separate new water sewer lines. They will have to dig if necessary, cost was quoted at $6,000 to do separate water meter with new lines.
It's not cheap at all.
What do you guys think of submetering?? Does anyone have any experience with this?
@Ilona Davidovich I don't think it will be as simple as just putting up another water meter. Someone correct me if I'm wrong, but I believe you would need separate water service to each unit. Aka separate water taps, separate water lines, and completely separate plumbing. Thats not going to be cheap or simple..
I agreed, it's not simple.
Where I am, zoning rules restrict the number of meters already to prevent the proliferation of illegal rental units. In others words, if you decide to subdivide into five illegal units, you can't call up and say "give me 4 more meters". That's aside from the issue of piping and wiring
Plus, there's another issue that people don't consider. When my co-worker was complaining about the landlord splitting the gas bill with him, he said "all you need is another meter". Even if one can be installed, around here, each gas bill contains a fixed charge per month for having the service. So you were to go on vacation for 2 months, there'll still be a gas bill. Same for electric.
I told my co-worker a typical bill of $20.00 for cooking gas actually consists of a month charge of around $13.00 for having gas service and $7.00 for the gas. His landlord has a gas bill of $40.00/month, which consists of the same $13.00 service charge and use of $27.00 worth of gas. If they get another meter, add the service charge in for the added meter, he's no better off than just splitting the gas bill.
I know about this issue as I been discussing this with tenants over the years.
Over the years, I tell tenants to take it easy on using utilities, especially like AC in the summer. I don't have tenants watering lawns at rental apartments. So far, worked out fine.
Funny, I have a unit I used myself as an office that has a separate electric meter. Due to health issues, the unit's been vacant, but I still get a $20.00/month bill. Got a letter from the utility asking if something is wrong with the meter. I called them back, told them nothing wrong with the meter, problem is with me. So the service charge per month runs about $20.00.
Rental Property Investor · Hughes Springs, TX · Member since 2017 · 16 posts · 15 votes
9y
I'm a new member to BP who happens to be an electrical contractor by trade although I work for a company right now and the company uses my license to do a small contract at LAX. That said there's a device called a Emon Demon and it's basically a Device you install between the main panel and the tenants sub panels that shows you what each electrical sub panel is drawing in terms of voltage and amp hours, I believe they even make some that will send you a email so you know who's using what power and itemize it on a spreadsheet, you can use that for billing purposes.
Flipper/Rehabber · Sarasota, FL · Member since 2016 · 15 posts · 3 votes
9y
@Kyle Doney@Lee V. I already have two seperate electric meters and boxes. I was speaking to a fellow investor recently who said he did it for under $1,000 but this was in Lehigh Acres so the costs could be a lot lower in that area.
I need to inquire in my specific area before making assumptions.
Contact these folks. They will split your bill for you depending on how many people in each apartment. Simple and easy.
It's called RUBS.
[A ratio utility billing system or RUBS billing is a method of calculating a resident's utility bill based on occupancy, apartment square footage, number of beds, or some combination of factors.]
The bill will be sent to you. You then send the bill to the company for a breakdown. They then send the split bill to your tenants who pay you directly.
Luckily for you, they have it specifically tailored for your city. Since you're not looking to add a meter or sub-meter, I would go for the simpler bill splitting option. Good luck!
Investor · Saint Charles, MO · Member since 2017 · 37 posts · 15 votes
9y
For what it's worth, you can buy water meters for between 55.00 and 100.00, depending on plastic or brass. From there you would have to separate water pipes. This may be simple or complex, depending a number of factors: Basement? Units running from a trunk line to bathrooms, kitchen, etc.
The electric would be more involved, especially if the circuits were not separated, as has already been said. I have a duplex that had 1 meter, but two panels (1 feeding the other), so it was simple (after rerouting locations of drops because of window placements). I am glad I did it, saved me from the hassle every month.
Investor · Massillon, OH · Member since 2015 · 266 posts · 156 votes
9y
I'm pretty sure it's illegal to split the bill up. It won't hold up in court.at least as far as I know in my state. Your best bet would be to charge a utility fee on top of rent as a flat fee. That way rent isn't so high. Instead of being x it's y+$100 electric fee and $40 water fee.
Funny, I have a unit I used myself as an office that has a separate electric meter. Due to health issues, the unit's been vacant, but I still get a $20.00/month bill. Got a letter from the utility asking if something is wrong with the meter. I called them back, told them nothing wrong with the meter, problem is with me. So the service charge per month runs about $20.00.
A few years back I bought a house that was REO in winter; it had been winterized, and I left the heat off during that winter. Gas company sends a notice that they needed to change out the meter. So when the day comes to change the meter, I asked the gas company tech why would they need to change that meter because the date on it was somewhat recent? He then asked if it's been empty and using no gas, and I said that's correct. Gas company tech then mentions that the usage pattern triggers something at the gas company to think the meter is broken, so they swap out meters in that case quite a bit.
Then last year, the gas company moved the gas meter from being inside the basement to being outside of this same house. This was supposedly a safety issue; the meters have a pressure regulator that in the case of really excess pressure can relieve pressure by a slight discharge of gas - not a safe thing to do in an enclosed space.
This year, the very same house, the gas company had to put in a new gas line from the street to the house due to a new higher pressure gas main being put into service. That higher pressure gas main means a different pressure regulator is needed in the meter (or so I was told), and that means another new gas meter at that same house.
Three new gas meters in the span of five or six years, all paid by the gas company. Lucky for me the tenant was able to be there when those last two happened, saving me the wasted days of waiting on the gas company tech.
For what it's worth, you can buy water meters for between 55.00 and 100.00, depending on plastic or brass. From there you would have to separate water pipes. This may be simple or complex, depending a number of factors: Basement? Units running from a trunk line to bathrooms, kitchen, etc.
...
You left out another very important part that does make it expensive.
The curbside shut off valve. Why is this needed? About ten years ago I was looking at a two unit property where the MLS listed it as having separate water meters; and sure enough there were two water meters inside the basement. But only one water line coming in from the street, and thus only one curbside shutoff valve.
So when one of the tenants stops paying on the water bill, eventually the water company comes out and does what they do - the water was shut off at the curb. Tenant who has been paying their water bill is furious of course - they have no reason to be forced to go without water, and apparently the non-paying tenant was getting "free rent" via incarceration so had no reason to get the water paid so it could be turned back on. And it was happening as I was looking at this property, so the tenant was expressing this. Not a good situation to find yourself in ...