Chicago question on moving to individually metered water

5 Replies | Chicago, Illinois

Hi Chicago folks. we have a 3-flat and we are looking at gutting the building to make the apartments individually metered for water and gas. Because our water bill is water, sewer, and trash, I'm wondering how this bill will split if we meter the water separately. Will Chicago now send us a bill for sewer and trash, or will they prorate trash to the tenants as well? Sewer is charged at 100% of water so I'm guessing/hoping that at least sewer will be pushed to individual units as well per their water usage, but wanted to confirm. Trying to figure out the total savings as we evaluate the ROI of this project. All thoughts welcome.

I'd be interested to know the costs of having separate meters installed for all units plus common area, I would assume the trash would still go to the common area bill but I have no idea as I have not seen it done.  You also would be one of the few landlords charging for water which may make it a little harder to get tenants in at first, (I say at first because I see all of Chicago going this way in a few years)

Take a look at other rentals. I have yet to see a rental in Chicago which has tenants paying water. This will be a huge turn off for tenants and I’d think twice about doing this. 

I understand the thought behind it, make tenants responsible for the bill, cut down operating costs, tenants will be more accountable if they’re paying, etc. yet all that only matters if you actually have a tenant. Any money saved would probably be offset by the possibility of having 1 month extra of vacancy. 

Everything can be factored into the rent. Landlord pays water? Rent is $1600. Tenant pays water? Rent is $1500. Catch my drift? The same stability you’re looking by putting the water bill on the tenant is the same stability tenants are looking for by having you pay the water. 

I can’t answer your question directly yet my advice is not to split it because 99% of Chicago landlords pay water and it would be harder to rent your place. Just factor it into the rent as stated above. 

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You could, and in my mind should, install the separate meters, and see about designating one unit as being responsible for common area usage.

Have all bills go to you. At lease renewal time you tell the tenants that you will pay for water and sewer up to $X plus tax on that $X, per billing term and they are responsible for all amounts over that $X plus tax per billing term. You pick up the trash tax. If they owe you money, you'll give them a copy of the bill so they can check your figures. At the end of the day, you are continuing the practice of landlord paying for water, but giving them a motive for conserving water. Should you ever decide to convert the place to condominiums, your water infrastructure will be in place. You'll also know your costs per unit better, and can adjust rents accordingly.

I have never heard of it being done. Also, when I was on the phone with the water company last week, they will only put the water in the name of the person listed on the deed. 

I have a 2 flat that only has one meter for gasn electric and water. When I list them on Zillow, I list the rent and in the notes section, I say there is a flat utility fee for water, sewer, trash, gas, electric, landscaping & snow removal. 

This isn't perfect, but it has allowed me to be competitive in my market, avoid doing taking the time/effort into a rubs program. By the time the tenant signs the lease, it reads the total rent including utilities.  

"Also, when I was on the phone with the water company last week, they will only put the water in the name of the person listed on the deed. "

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Yup. That's why I said to have all bills go to you. Only way Water Department will do it. Just cover the first $Z dollars on each bill (as I described) and make the tenant responsible for the overage.