Water Sub-Metering in San Diego

15 Replies

I am trying to find a company that will sub-meter and bill for water in my small (12 units) townhome community. A Google search only came up with 2 or 3 companies some of which only deal in large multifamily properties. Can someone point me in the right direction?

Thanks all.

I have considered sub-metering but have never looked into it.  In Germany the homes (at least some) have a 2 meter system so that sewage is charged based on sewage usage.   This leads me to conclude that installation of meters can be done at reasonable expense.  

However that still leaves the reading of meters and calculating water costs based on a bill.  

Our small unit properties (4 or less units) we have percentage of water bill charged to each tenant based on what we believe to be equitable percentage.  Our one property that has 8 on the meter we pay the water but tenants do not realize the expense.  For example we can not obtain rent equitable to the water expense.  However with 8 units on meter it is tough to charge based on any usage because water savings of one party makes so little difference to the bill. 

So I am curious what you find out.  

Good luck.  

@Michael Johnson Our properties are sub-metered, and water + sewer billed to tenants.

This is for two reasons:

1. The City forces developers to submeter when additional units are added to a property and

2. Water is expensive and I'd rather tenants pay.  :)

Any plumber can help figure out if it's going to be physically practical to submeter based on the existing construction.  You can coordinate that part on your own.

For automated billing, the research I've done and quotes I got say it's really only cost effective at large scale (dozens of units at one property).  Sounds like you're seeing the same. We do it simpler:

A. There's a published per gallon cost of water usage given to tenants.  This mirrors any increase the City makes.

B. There's a submeter for each unit.

C. Written into the lease is an estimated water usage cost per resident (about $30 per unit + $10 per resident).  This amount is charged with each month's rent.

D. When the tenant moves out (or when they request it), I read their actual usage and either credit or debit them for the difference between actual and estimated.

This has worked fine for us and is far cheaper than automated reading and billing.  The only challenge is that utility usage is sometimes contested, so there are times when rent is paid on time, but utilities are paid later.  Some legal intricacies there.

Good luck!

Thank you everyone for the posts and messages. I was able to acquire quotes from 3 different companies in the area and will most likely be moving forward with Meternet once we get board approval. 

Originally posted by @Michael Johnson :

Thank you everyone for the posts and messages. I was able to acquire quotes from 3 different companies in the area and will most likely be moving forward with Meternet once we get board approval. 

 I wonder if they do sub-metering for detached duplexes (2 houses on a single lot). It would be great to pass these water bills over to the tenants. 

Originally posted by @Catherine Cebulski :

Hi:

Can you share the three companies you contacted for water sub-meter?  I’m getting a quote from Urban Meters and Readers for my San Diego duplex but would like to contact other companies as well. 

Thanks!

The companies you contact will be far too expensive for a duplex scenario.  I highly, highly suggest you go the route described in previous posts - not sure if it's this thread of a previous one from last year or so.  Sorry I don't have the link handy. 

 

@Michael Johnson I experience with meternet and and they bill tenants directly with service fee built into their monthly statements. @Victor G. For a duplex you can get a sub meter online (NSF 61 cert) for about $80 and have a plumber install it pretty quickly depending on your plumbing construction.

@Dan Heuschele @Justin R. @Casey Murray

Best of luck!

Along these same lines, does anyone know if passing on the utility cost to the tenants would count as a 'rent increase' under the new rent control law? I posed the question HERE on another thread and haven't gotten much feedback. Any insight is appreciated

Originally posted by @Kyle Smith :

Along these same lines, does anyone know if passing on the utility cost to the tenants would count as a 'rent increase' under the new rent control law? I posed the question HERE on another thread and haven't gotten much feedback. Any insight is appreciated

My view is your not asking the right question...

I have read the rent control regulation too many times.  There is a clause against substantially changing the lease.  It is vague about what substantially change is but does indicate adding verbiage to allow certain family members to move in to a unit is not a substantial change (I recommend all LL add verbiage to their lease to protect this right).  I suspect adding utility costs is a substantial change to the lease and is prohibited. 

If your lease already has the tenant paying utilities (does not appear to be the case in your case), any increase of utility cost passed on to the tenant is not a rent increase. 

Good luck

Originally posted by @Dan Heuschele :
Originally posted by @Kyle Smith:

Along these same lines, does anyone know if passing on the utility cost to the tenants would count as a 'rent increase' under the new rent control law? I posed the question HERE on another thread and haven't gotten much feedback. Any insight is appreciated

My view is your not asking the right question...

I have read the rent control regulation too many times.  There is a clause against substantially changing the lease.  It is vague about what substantially change is but does indicate adding verbiage to allow certain family members to move in to a unit is not a substantial change (I recommend all LL add verbiage to their lease to protect this right).  I suspect adding utility costs is a substantial change to the lease and is prohibited. 

If your lease already has the tenant paying utilities (does not appear to be the case in your case), any increase of utility cost passed on to the tenant is not a rent increase. 

Good luck

Thanks for the input @Dan Heuschele. I was hung up on that clause as well and think you're probably right that implementing a RUBS would fall under the umbrella of a 'substantial change'. While the property still performs well enough without a RUBS, the cost of water never seems to go down so that has me concerned I've missed the boat (no pun intended) and will always be playing catch up. I doubt that the rent increases allowed under the new law will ever make up for it. Until the current tenants move out of course...

 

Originally posted by @Kyle Smith :
Originally posted by @Dan Heuschele:
Originally posted by @Kyle Smith:

Along these same lines, does anyone know if passing on the utility cost to the tenants would count as a 'rent increase' under the new rent control law? I posed the question HERE on another thread and haven't gotten much feedback. Any insight is appreciated

My view is your not asking the right question...

I have read the rent control regulation too many times.  There is a clause against substantially changing the lease.  It is vague about what substantially change is but does indicate adding verbiage to allow certain family members to move in to a unit is not a substantial change (I recommend all LL add verbiage to their lease to protect this right).  I suspect adding utility costs is a substantial change to the lease and is prohibited. 

If your lease already has the tenant paying utilities (does not appear to be the case in your case), any increase of utility cost passed on to the tenant is not a rent increase. 

Good luck

Thanks for the input @Dan Heuschele. I was hung up on that clause as well and think you're probably right that implementing a RUBS would fall under the umbrella of a 'substantial change'. While the property still performs well enough without a RUBS, the cost of water never seems to go down so that has me concerned I've missed the boat (no pun intended) and will always be playing catch up. I doubt that the rent increases allowed under the new law will ever make up for it. Until the current tenants move out of course...

 

 I am not as convinced as you that the rent increase will not keep up with utility increases.  5% + local inflation most years will mean 8%+ allowed rent increase.  What I see from utilities is that the increase is often a higher percent than 8% but that it is seldom as often as yearly.  For example, lets say they raise utilities 15% after not having raised them in 30 months, then the allowed rent increase is greater than the utility increase.

I like the tenants paying utilities because

  • It provides incentive to conserve.
  • I do not believe I can set the rent at market + utility cost and still get quality tenants.  Tenants undervalue the cost of utilities especially if they came from an apartment situation.
  • It encourages the tenants to report water leaks timely because they pay for the water costs.
  • If anything accidental such as hose is left on all weekend happens, I am not paying for the tenant's mistake.

None of the reasons is because I do not believe the allowed rent increase will keep up with utility increases.

We have had a few plumbing leaks (slab, just past the meter, etc.).  For these situations, we subsidize the utility cost as that is our issue and not the tenant's issue (we try to be fair - we typically charge them the cost of their water usage from the period prior to the leak and we pay the overature).

Good luck

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here