I am planning on splitting the utilities so that I wouldnt have to pay for them. The upstairs tenant is currently paying $700 month but electric and heat is currently included so I was figuring reducing his rent by $100 and having him take over his part of the utilities after the split. The owners stated that they wouldn't go below 85300.
Howdy @Daniel J Aldrich
You seem to have everything covered. You also show positive cash flow. Here are some questions for you.
1. How does the current rents compare to the local rental market? Low? High? Average? I would not lower my rent for current tenants.
2. Is it acceptable practice locally to bill tenants for utilities? If it is I would definitely pursue it.
3. You only mentioned the upstairs tenant. What are you doing with the downstairs tenant?
Hi John, the first floor is currently vacant so that is not an issue. The upstairs is a small 2 bedroom apartment.. the local rents for a 2 bedroom are 600 - 750 with the higher number for apartments twice the size.
Most tenants around here do pay for their own electric and gas. Water and sewer is usually included.
As far as ther downstairs goes, since the downstairs kitchen is decent size, I was looking at walling off the dining room and making a 3rd bedroom. 3 bedroom apartments appear to rent for 750 - 1000 so I am thinking I would sacrifice the dining room for the added value of the extra bedroom. Or would removing the dining room actual lower my value?
Check with local property managers to see what is preferred. Is there an adjoining living room to the kitchen that presents an open appearance? If so, it might work. I am no expert. Just my thoughts.
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