Holliston, MA · Member since 2017 · 38 posts · 14 votes
Hello BP forum. I just bought my first three family house In Lancaster Massachusetts, I'm very happy that I was able to pull it off. It came with one set of tenants who have been paying 750 per month which is very low for the area. The heat and hot water are included so I told them I was going to raise the rent to 1000 in a few months but today I just found out that the previous landlord was also paying for the electric. Should I / can I raise it even more or should I honor the 1000 I told them.
Congrats on your purchase. Is the increase to raise rent to market value and/or to cover heat? If you have a 3 unit how are you splitting utilities. Using a RUBS method, per square foot method, per person, etc. check your state law. In Illinois you are limited on utilities especially if it’s all on one meter. If it’s not in the lease you cannot charge unless mutually agreed between both parties. I would honor your word if you told them heat only then address the electric next year. Check out what other landlords are doing. Is it typical the utilities are included in rent and what tents are they collecting then? Analyze your market so you don’t price yourself out. I do this in my market to make sure I’m competitive.
Congrats on your purchase. Is the increase to raise rent to market value and/or to cover heat? If you have a 3 unit how are you splitting utilities. Using a RUBS method, per square foot method, per person, etc. check your state law. In Illinois you are limited on utilities especially if it’s all on one meter. If it’s not in the lease you cannot charge unless mutually agreed between both parties. I would honor your word if you told them heat only then address the electric next year. Check out what other landlords are doing. Is it typical the utilities are included in rent and what tents are they collecting then? Analyze your market so you don’t price yourself out. I do this in my market to make sure I’m competitive.
Attorney · Attleboro, MA · Member since 2015 · 412 posts · 165 votes
7y
Sorry to be late to the party but here is my two cents. You didn't mention if the units are individually metered. Are there four meters on the building - one for each unit and one for the common areas? If it is not individually metered you can't really charge it separately.
Now not to be mean or anything but why didn't you know about this prior to closing? Do they have a lease that spells out who pays what? And you can only break out the utilities IN WRITING.
Are these folks under any kind of written lease, even a month to month one? (All of which I presume you found out prior to closing)
I would have the electric checked out ASAP to confirm it is all separate. If it is not, you will have to pay the electric for now but I would look at separating them out in the future.
I would also get them under a lease even month to month if they are not.
And be careful how you raise the rent, be sure to give them proper notices.