Running the numbers in Massachusetts

12 Replies

Hey BP Boston! I have a question on running the numbers in Massachusetts. I’ve been basically running the numbers on multi-family B+Hs for practice the past 3-6 months. I always run them assuming I wouldn’t be living in the property even though I plan to house hack. My question is should I be budgeting money each month for electric, water, and garbage or is it possible to have the tenant take care of all these things as long as the property is set up for that? I’m finding it makes a huge difference in cash flow and what I can afford. Let me know!

Hi @Joe Ruggiero Typically the tenant pays for electric and garbage and you handle the water bill. Make sure to account for insurance, property tax, vacancy, maintenance & repairs and property management as maybe in the future you won't be able to manage it yourself or get burnt out..Reach out if I can help you in any way.

@Joe Ruggiero It's going to depend on what kind of property you buy, if the meters are separated already, and if not, whether you plan to separate them out. 

Water is the trickiest utility to submeter in MA - there have been a few discussions on BP on that topic (

Good luck with your search and let me know if there's anything I can do to help. What towns are you looking in?

@Enis Shehu Thanks Enis! I've been budgeting all of those things out, but I think I've been shorting myself cashflow because I've been budgeting in both electric and garbage. If I can ask how do you control potentially losing money on water? Do you budget water into the rent? What if you have a tenant who takes 2 hr showers.. hypothetically lol 

@James E. Thanks James! I plan to buy a 2-4 unit (most likely 2 in this area) property. I'm looking pretty much everywhere on the north shore as well as some of the surrounding communities. I've looked at Lowell, Haverhill and Nashua as well, but I'd rather stay on the north shore if I can.

Hi @Joe Ruggiero

I agree with @James E.

Check to see if everything is separately metered. Review the Massachusetts laws, especially those pertaining to water. Water seems the trickiest and I often see water and sewage costs covered by the landlord. Here’s a link that provides some helpful additional info. Happy to connect and share with you my analysis criteria!


@Joe Ruggiero

If separate electric- tenant can take care of 

water/sewer is typically a landlord (unless separate meters) 

trash- is city/town dependent, but they typically buy their own trash bags 

For water reduction, you can purchase shower with less GPM as well as faucets. Could also look into efficient toilets with less GPM. Also consider if you have dishwashers in unit, or a washing machine- All of these can use lots of water! 

I agree with @Enis Shehu , the only thing I would change is accounting for property management. The reason is you should know right now if you are planning on using a property manager or not. As a new investor your numbers are going to be super tight when trying to compete with more experienced investor. You need to find ways to give yourself a tactical advantage. I also believe unless your portfolio is over double digit units you will not be able to afford a property manager. 

@Steve Bracero Thanks Steve! These are all really good bits of info. Most of the properties I'm looking at have separate electric -- I need to start checking to for any mention of sub-meters for water. Without sub-meters I think it makes a lot of sense to incorporate as many water efficient appliances as possible.

@Josue Velney Thanks Josue! Property Management is a line item I've had some internal debate over as well. I plan to manage myself for the foreseeable future, but everything I read says to always budget in PM just in case. The issue I see is exactly what you said where as I'm trying to get started and don't have all this cash to put down the numbers are really tight. I've taken the approach that if it's an a location I really want to be in and the only thing that makes the numbers work is pulling out PM then I'll do it. I will have to pay PMI as well, so the way I see it is that if I at least manage the property until I have 20% equity and can refi to drop PMI then that money will then be freed up for management if I need it.

@Joe Ruggiero great idea! I wish you lots of luck. You are heading in the right direction and asking the right questions. 

@Joe Ruggiero If your planning on living on the property I would sub-meter out the water. That will save you thousands. It will be easy for you to read the meters each month since you will be living there. Once you move out you can have a PM do it or continue to do it yourself but either way its worth the savings. 

@Rob L. Thanks Rob! The more I've read the more I feel submeters make a lot of sense.

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