Sub-metering a duplex, worth it or not?

Question

Hello everyone!!

I have just bought a duplex, renting one unit to a family and occupying the other. In the process of fixing up minor projects around the house to eventually have both sides rented.

I’ve received the first quarterly water/sewer bill in the mail and not the biggest fan of paying for everyone’s water. Electric and heat are all separate. This is very common for western Massachusetts where the landlord pays the water bill.

Is it worth it for me to sub-meter? Will I lose interested potential renters? Is this ultimately worth doing or do I just adjust the rent to cover the average water bill cost?

Thank you so much in advanced for your help and input! So excited to continue to grow in knowledge and doors!

Stay healthy everyone!

Alicia

Aaron Montague · Answer

@Alicia Calderon

This is a "do the math" question in my opinion.

What is your ROI on installing a new meter?  If your bill is 50/month total for both sides, and the cost to put in a new meter is $2000 it will take 80 months to get back to even, 40 if you did not occupy.

Altough per @Mike McCarthy's suggestion if you are billing them each month and only eating about $15/month, it'll take 134 months to get back to even.  The other factors here would be actually back billing people, getting the bill post move outs, etc.

Mike McCarthy · Answer

@Alicia Calderon I’ve found it’s not worth it for water. It’s thousands of dollars usually to get a new city/town meter installed and just doesn’t have the payback.

I estimate the water payment and split it. Then drop it a few dollars so no one can get upset that I’m overcharging them. So in a 3-unit for example, if the water bill is $60, I’ll charge each $15/mo. I eat part of the bill so I don’t have to explain at some point to someone why I overcharged if the bill happens to be $50 a few months.

Or just wrap it into the rent.

Marcus Auerbach · Answer

Not worth it. You can bake into the rent or have some sort of a split agreement.

Alicia Calderon · Answer

@Brian Ellwood I’ve heard that a sub meter inside the duplex can be around a grand or so with installation, but getting a whole new water line from the city can cost 10 grand.

If I sub meter my existing line, than once I move out of the side I’m currently living in I will not have easy access to see it each month. Thinking it’s a bit of a hassle but water here roughly is $50 for both sides per month. And this I based on one quarterly bill cycle so far since I just moved in December 20th.

John Teachout · Answer

I should add that splitting water is much easier than splitting electrical service.

Pat L. · Answer

We can get a new water meter from the town for $283. Hook it up with the 'approved' $85 back flow valve & we are done. BUT I have a 6-unit with 3 ensuite laundry hookups & water runs $70-$95/month total, so our higher rents more than compensate without the need to separate.

John Teachout · Answer

There are two discussions going on here. There is a difference between "splitting" the water/sewer supply (ie, city action) and sub metering which just means you put a water meter into the line that feeds that unit. So you still pay the whole bill but you can apportion on a pro-rata basis the amount they used. Since it's "measured", it shouldn't create any strife.

Most water bills have a minimum usage of xxxx gallons and then so much per gallon over that. Often the sewer bill just doubles the water bill but that varies by municipality.

So you figure out how much total water was used (the city will bill you for that) and then you read "your" meter that feeds the other unit and adjust the bill for that amount. So if you use 60% of the water, you pay 60% of the bill and they pay the rest.

A meter can be purchased for between $50 and $300 depending on what and where you buy. Installation could be done by any plumber.

Jeff Hubert · Answer

The City of Fort Lauderdale supplies the meter and valves.  You have to hire a plumber.  All in the cost to add the additional billing for the other unit will be just under 2K.  That's Fort Lauderdale ...your town/city may vary of course.

John Teachout · Answer

Whether it's worth the hassle would come down to how much this would affect you financially. You could roll the water into the rent and maybe that's the easiest. However, any utility that isn't measured has no incentive for the tenants to conserve. If they have a toilet that's leaking it can go through many thousands of gallons in a month and if you only get a bill quarterly, it could be $1000 more. (no, that's not an exaggeration)  So even if you get in a situation where it's not convenient to read the meter, it may be worthwhile. Water usage, even more than electricity and gas is dependent on the number of residents. If you're billed quarterly, that timetable would probably work with your periodic inspection, furnace filter changeout, leak check, etc.

Alicia Calderon · Answer

@John Teachout thank you so much for that information. That’s exactly what I am asking. I know getting a whole new water line/ sewer can be close to ten grand.

Now I’m your experience is it worth the hassle? Or do I just use water bill increases as a reason to raise rent every so often and the tenants will be more understanding?

Sub-metering a duplex, worth it or not?

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