Due Diligence on Utilities

2 Replies

Hi All,

For our SFR in Pennsylvania, we ran the numbers according the wholesaler. It turned out that the water and sewer bill was 3 times the amount budgeted. Cash flow killer.

When going through the due diligence on a SFR, how do you verify utility expenses? 

TYIA!

@Daniel Hyman this is where local market knowledge is so important. I invest locally primarily because I can more or less anticipate what the expenses on a property will be, and so I take a significant component of the risk out. If you are investing out of your area I would think you would want to lean heavily on a realtor, property manager or contractor to help you with these types of things. 

Most utility companies will tell you what the average bill was for the previous year. Call them next time to verify.