Landlord pays the waterbill

[Account Closed]

Hey Bp! What is your advice on buying a property where the landlord pays the water bill? Are you losing money? (4 unit)

[Jon Alke]

Depends on the rest of the deal.  In my market it is standard for the landlord to pay water/sewer/garbage.  Plenty of deals cashflow despite this.  Many around here would tell you to figure about 10% of additional expenses from your gross revenue, although your current rates and what other utilities you have to cover obviously make situations variable.  If you are worried about it some recent bills should be easy for the current owner to provide as part of your due diligence.  If covering water isn't typical for your market and the units are in demand you could consider switching this to tenant pay and improve the property's performance.