Electricity bill doubled with new tenants. Can we investigate?

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Electricity bill doubled with new tenants. Can we investigate?

Michelle Lyn
Member since 2018 · 3 posts · 0 votes

Hello BP folks! We have a 3-family rental in New York. 2 units have the same tenants for years. Other unit moved in in Sept 2020. Utilities are shared so we include them in the rent. 

We're seeing this winter that the electric bill has doubled over what it typically is (it's now about $1000/month)–pretty much since the new unit moved in. This is especially strange because we installed solar last spring and anticipated at least some savings through the winter. We're wondering what's going on in there. We live out of state so can't just swing by. My elderly mother lives in the upstairs unit so she is onsite but can't just barge into the downstairs unit and doesn't have much of a relationship with them.

What are our rights to check in on this? I'd like to let them know our situation and ask them what's going on but I don't know what's allowed. Any insights from the forum would be appreciated.

Thank you!

michelle

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Tracy StreichPro Member
Real Estate Broker · Tulsa- OKC Oklahoma · Member since 2017 · 868 posts · 801 votes
5y

Sure you can check on it.   Take an electrician with you when you go.   Give the proper notice and check it out.   You don't have to tell them you are checking the electric.   You want to see what is going on without them self correcting anything. 

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  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    5y

    What type of heat do you have?  If baseboard/Cadet, do they have a sofa shoved in front of the source?

    Washer/dryer or electric hot water?  Maybe too many guests stopping/staying and taking showers and doing wash?

    Maybe marijuana?  Grow lights use a ton of electricity :)

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  • Tracy StreichPro Member
    Real Estate Broker · Tulsa- OKC Oklahoma · Member since 2017 · 868 posts · 801 votes
    5y

    Sure you can check on it.   Take an electrician with you when you go.   Give the proper notice and check it out.   You don't have to tell them you are checking the electric.   You want to see what is going on without them self correcting anything. 

    [email protected]918-728-8080
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  • Julie Hartman
    Property Manager · Denver, CO · Member since 2021 · 667 posts · 587 votes
    5y

    I would definitely suspect grow lights but I manage in Colorado so we are always suspicious of that type of activity. We do quarterly furnace filter changes which gives us an excuse to enter the home (we can't search every room in this case) but we can peek at things and smell the air as we walk through. As an owner, you have every right to do an inspection of the house, you just need to follow the lease for notification to the tenants. If they are growing in there, you should be able to smell it. I would also keep an eye on the water bill because that will increase drastically if they are growing too. You could also ask your electric utility provider to do an energy audit for you. They should be able to tell you where the excess usage stems from.  

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  • Dan Maciejewski
    Realtor · PInellas County Largo, FL · Member since 2016 · 902 posts · 810 votes
    5y

    Yes, you can, at least with my lease in my state. 

    My 1st thought was grow lights or space heaters, both of which should be pretty obvious on inspection.  We give 24 hour notice, though, so they "could" have time to hide them if they though we were looking.

    As an aside, that's why I don't buy w/ shared utilities or water!

    Good Luck!

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    5y
    Originally posted by @Steve Morris:

    What type of heat do you have?  If baseboard/Cadet, do they have a sofa shoved in front of the source?

    Washer/dryer or electric hot water?  Maybe too many guests stopping/staying and taking showers and doing wash?

    Maybe marijuana?  Grow lights use a ton of electricity :)

     Things that jumped to the top of my head: grow lights for marijuana; community washer and dryer (hey friends, come use my free laundry!); people running heat with open windows (this is more common than you think); elderly tenants leaving something on. 

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  • Dennis Wayne
    Member since 2020 · 339 posts · 356 votes
    5y

    People leaving Space heaters run 24/7 would do that . You need to run your business more professionally if your going to do out of state investing

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  • Michelle Lyn
    OP
    Member since 2018 · 3 posts · 0 votes
    5y

    Thank you so much everyone for the follow up!

    Growing was our first thought too. We can't go visit right now (we live in CO) but I may see if our realtor would go with an electrician. Or someone who could give a sniff around and know what they're smelling for. They did just ask for an outlet repair so it's good timing to go in "under cover" so to speak.

    The heat, dryer and stove are gas. The water bill has gone up about $30/month. Not sure that's relative to the electricity increase but worth noting I guess. I don't think there's anything in their apt that would require entry with a regular cadence. The furnace/heater are in a separate room off the basement apt.

    I'll check with the electric company about an audit—thanks for that tip @Julie Hartman. We're considering just leveling with them and saying the bill has increased and it's not sustainable and just asking if they are running any high energy things. Don't know how we'd phrase things yet but we're mulling that idea over. If they are growing, maybe bringing it up would make them worry? IDK.

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  • Christian Manhard
    Contractor · North Conway, NH · Member since 2018 · 59 posts · 48 votes
    5y

    I would get an estimate from an electrician on how much it would cost to split the meters and put the cost back on them. That way it's not coming out of your pocket. The upfront cost might be a lot but it would be worth it in the long run.

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  • Julie Hartman
    Property Manager · Denver, CO · Member since 2021 · 667 posts · 587 votes
    5y

    One other thought for you, in addition to excessive power, grow operations need adequate ventilation. This could be an open window, which would cause a spike in heating bills during the winter. The other is an extra ventilation system which you can't hide. There may be a perfectly innocent explanation for the power spike that is outside the realm of a grow operation and I hope that is the case.  With that said,  I would definitely pay a visit to the property (or have someone go on your behalf) to do a walk around of the exterior while they are are checking out the interior. 

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  • Tim Milliano
    Member since 2020 · 6 posts · 2 votes
    5y

    Sounds like a grow to me as well.  

    If not, after the solar was installed do you know for a fact that your net meter was installed by your power company?  That should be the last step in getting powering up your solar system.  If they didn't for some reason and left the old, one way, electric meter in then all the power that your solar is producing going back on to the get will count against you and could be getting charged more. Net meters spin both directions, old meters one go one way so if you are pushing power out to the grid it could be charging you for power go on to the grid and charges you for your use.  Doing the exact opposite of what you got solar for.  This should not happen but I see some silly stuff in the solar world.  Do you have monitoring for your system?  You would be able to see spikes in usage if you did. If you saw 12 hour of high use then 12 normal every day you probably have grow.  

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  • Bradley Padula
    Rental Property Investor · Boston, MA · Member since 2019 · 124 posts · 121 votes
    5y

    I agree with what others have posted, give tenants proper notice and  have a walk through inspection performed. Until then, its speculation as to if they're growing weed, have an open window, or are running a bunch of space heaters. I'd also take a look at my bills month over month to make sure there were no large increases to either electric supply charge and electricity delivery charge.

    You need some boots on the ground now and going forward for situations like this. I personally wouldn't ask my mom to check on a unit for me alone due to safety factors.

    If this is a long term hold for you, definitely get the utilities separated and pass them on to tenants as their leases expire/renew or as new sets of tenants move in (unless you think you tenants with existing leases will sign a lease amendment agreeing to pay for the newly separated utility for their unit, which is unlikely)

    Please keep us in the loop with what happens! Very interested to see what the cause is!

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  • Thomas Wolfe III
    Hedgesville, WV · Member since 2018 · 1 post · 1 vote
    5y

    They could be mining cryptocurrency on their computer. That would definitely run up your electricity bill by a lot. 

    1Reply
  • Amos Mainville
    Specialist · Elmira, NY · Member since 2019 · 33 posts · 38 votes
    5y

    @Michelle Lyn

    Where in NY?

    Who manages the property since you are at distance? What is in your lease for inspections?

    NYSEG just hit me with a bill that's triple my usage. Ended up being the meter reader read it wrong.

    I would heavily consider getting the utilities split and put that on the tenant.

    Amos Mainville

    Chemung Valley Home Inspection LLC

    Elmira NY

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  • Mike S.
    Rental Property Investor · Huntsville, AL · Member since 2013 · 419 posts · 323 votes
    5y

    We had rodents get into our system and caused the heat pump to remain in emergency heat mode continuously, even when AC was running.

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    Another vote for an inspection.  You can let them know the electric bill has spiked in the last few months and you need to check on things.

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  • Martin NealPro Member
    Rental Property Investor · Chicago, IL · Member since 2017 · 293 posts · 383 votes
    5y

    @Michelle Lyn politely and respectfully ask that they manage their consumption and give tips on how to do so. It’s also a good idea to write into your leases that if they are going to overuse, you have the right to increase rent or bill back for excessive use.

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  • Harriet Baldwin
    Financial Advisor · Elmira, NY · Member since 2015 · 132 posts · 67 votes
    5y

    Second the suggestions for finding a local manager to be able to help since you are out of town. One thing not yet mentioned - NY has mostly old-fashioned onsite meter readings (not remote), typically every second month. If a unit is vacant and then occupied, the algorithm may assume a month 2 actual read that is lower than the month 1 estimated read shows that the meter has "round tripped" (like a car going to 1 mile on the odometer after 99,999) - although that would be more like $3,000 than $1,000 higher ime. A call to the utility usually clears it up (it's happened to us a few times).

    0Reply
  • Michelle Lyn
    OP
    Member since 2018 · 3 posts · 0 votes
    5y

    Thank you so much everyone! We have been considering splitting out the units. I'd like to go that route eventually. We ended up taking over the house a little while ago (mom went into foreclosure and so we bought out her debt and took over the mortgage) and so we're learning the ropes. We've been riding it out without a property manager knowing that the time is going to come and well... ta daaaaa. It's in the north Bronx so if anyone has referrals send 'em over (apologies if I'm supposed to post that in a different forum). Really appreciate all the comments and the chance to learn from you all.

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