First Duplex - Included Utilities and Lease Concerns

[David Bahr]

Hi everyone.  I just got my first duplex under contract in Bennington, Vermont and wanted to get opinions on handling the new leases in the acquisition.  There is one boiler serving both units, and I'm concerned that my inherited tenants will respond more negatively to raising rents as opposed to no longer paying for heat in the lease.  This is my first property so I would appreciate any comments, am I required to have two boilers, or can I simply charge a flat rate for heat per month?  Does anyone have experience instituting these changes?  Southern VT gets pretty cold!  

Any other value adds for raising rent in this scenario?

Here are the numbers:

Purchase price: $60k

25% down payment

Rents: $1600/mo total (both sides)

Heating costs: $350/mo (Whoa!)

Taxes: $200/mo

Mortgage (Principal/interest): $230