Edmonton, Alberta · Member since 2017 · 4 posts · 1 vote
Hi everyone,
I am in the process of building a single family home with a basement suite in Edmonton, Alberta as my very first real estate purchase. I intend to hold this long term as a rental property. My big dilemma is how to split utilities. I can get each unit metered separately at a cost of 5 000 dollars which would be 25 dollars a month on the mortgage ( 5%down/25years/3%financing). The total cost of the house will be around 400 000 dollars and could bring in rents of 1700 + utilities upstairs and 700 + utilities downstairs. I am wondering if that extra cost (25/month) is worth saving the hassle/risk of the other two options?
1. Include utilities in the rent with the risk of personally paying for over usage.
2. Having upstairs and downstairs tenants split 60/40 which leaves potential for dispute on who used what and also a less appealing rental.
If this is a purpose built rental property, as opposed to a personal home with a basement suite, your potential rent is far to low for a property valued at 400K. You need total rent in the $3500+/month range if you want to see any positive cash flow long term. My advice would be to not hold longer than 5 years and unload it before the expenses begin killing your cash flow. You do not want dead equity lowering your ROI or eating into your true cash flow numbers.
As for the metering I would definatly opt for all separate meters. You need tenants to be able to put all utilities in their own name.
Edmonton, Alberta · Member since 2017 · 4 posts · 1 vote
8y
Thanks for the reply guys. I intend to live upstairs for a few years and eventually rent out the whole thing and yes I'd have to agree, rents are lower than you'd find in most areas for 400k but it will be brand new and require very little for maintenance costs.
Edmonton, Alberta · Member since 2017 · 2 posts · 2 votes
8y
That rent seems great for average Edmonton, and I agree with having two meters for each level. Depending on interest rates and how much you're putting down will determine if it's a positive cash flow situation.
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