General Landlording & Rental Properties

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Alexander Zurn
  • Lender
  • PA
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Best ways to reduce expenses on small multifamily (heat, water)

Alexander Zurn
  • Lender
  • PA
Posted Jul 15 2019, 12:50

Hello - I have an out of state 2 unit rental property that cash flows but could be way better if I can figure out the best way to pass all expenses to tenants. Right now they only pay electricity and I am paying water & heating oil. Problem is  house was built in 1890 and has single heating & water systems. In return, I do charge higher rents but it is not exactly offsetting the bills. I pay Oil (in cold months) and water every month. 

Question: What is the best way to split these bills appropriately so that next tenants that move will pay for this? I have heard of the Flow (I believe?) water systems that can split water bills in MF's on BP podcast - would this suffice? Same question for the heating system, is it best to just include in the lease that the bill will be equally split among tenants (i.e. 1st unit has 2 tenants, 2nd unit has 1 so bill will be split 3 ways).

Of course this would come with a drop in rent (if necessary) but want to be prepared come May 2020 when both leases are up to avoid vacancy and increase cash flow.

Thank you in advance!

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