Apartment Complex Question
4 Replies
Yousif Denha
posted 27 days ago
Asking about what expense you guys have with apartments and also what do you make the tenants pay?
I'm curious because I'm looking at property in Michigan and they sent me an income statement and it shows they paid water electricity and gas but in the lease agreement it says that the tenant was paying?
Thanks Let me know!
Nathan G.
(Moderator) -
Real Estate Broker from Cody, WY
replied 26 days ago
Sounds like they made a mistake on their lease or just aren't very professional.
You typically want the tenant to pay utilities directly. If the utilities are on a shared meter, then you may have to include them and bump the rent higher to cover the cost. Try to avoid that as much as possible.
Shane Parker
replied 26 days ago
Yes I agree most likely an error or sloppy management.
Water is the one utility I see the most that is not separately metered.
Jonathan R McLaughlin
Rental Property Investor from Boston, Massachusetts (MA)
replied 26 days ago
@Yousif Denha What @Nathan G. said, and remember that you win twice on tenant paid utilities....you don't have the cash flow expense AND the pro-forma evaluation of the building is higher for a sale since those expenses don't come out of the NOI.
Drew Sygit
Property Manager from Birmingham, MI
replied 25 days ago
Apartments have common areas, so landlord usually has an electric meter in their name to cover common area lights.
Regarding the gas & water, they may only have a single meter for each and pay it, but then segregate the bills to each unit.