Water and Sewer Costs in Cleveland area
Bob CollettPro Member
Property Manager · Brecksville, OH · Member since 2014 · 486 posts · 464 votesI am trying to find solutions to the high cost of water and sewer relative to the rent income and other costs of ownership. My questions are:
1.) How can we reduce tenant water consumption in a 2 family property... especially a section 8 property.
2.) Are there programs where MF landlords can get subsidies to help pay the cost of monthly water/sewer bills.
3.) Has anyone worked with installing separate meters in 2 family properties in the Cleveland area. What are the costs? Will the water company bill tenants for separate meters? Can we make tenants responsible for water on their lease if we have separatge meters
Thanks
Bob
Water bills are the bane of my existence, I could ramble about this subject all day. I don't want to do things like remove external spigots, because if tenants have space for a car or garden I want them to get full use from the property. But I've tried a lot of things to handle the bills.
You can make the tenant responsible if they have their own meter, and I've done that in a couple units, but I wouldn't recommend it at all. The issue is that if they don't pay, you as the landlord need to pay the whole back bill and reconnection fee to turn it back on for the next tenant. If I'm dealing with an eviction or less than friendly move out and they were responsible for their own water, I budget $400 for the water. It sucks. The only people I let do that now are inherited tenants who have been paying their own water for years.
For subsidized programs, you can get some utility reimbursement for what you're paying - also often for providing appliances! I have one EDEN tenant in a 3 bedroom house who I pay water/sewer, and provided all appliances. We're in the process of renewing her lease and it looks like I'll be receiving $152 monthly for providing the water and kitchen appliances. That's a big help. I really can't recommend EDEN enough, they're much easier to work with than CMHA, and just on a human level their programs are really reaching the people most in need of stable housing. If you're dealing with apartment buildings, I know Cleveland would love to have more landlords sign on to provide whole buildings of subsidized housing for vulnerable populations like kids aging out of foster care, and I'm sure there would be a lot of subsidies available there. I think they do a quarterly request for proposals on this? It's been a couple years since I looked at it.
On meters - depends if you're really in Cleveland, or Cleveland area, because cities vary. Most of my rentals are in Bedford, which has a ridiculously high minimum monthly charge per meter, $53.91 per month. Only units I have that ever go over are families or have a leak. I have one lot with a 3 bedroom house (family with 2 kids), and three efficiency units, each with a bachelor in them. If you put all three of these guys in 1 unit they still wouldn't go over the minimum. But, because it's 4 units, I pay a minimum of $215.64 for water at that lot every month. And the minimum goes up every year. If I could have it on one meter I think I'd probably be at about $90 a month.
So in Bedford or cities like it with high minimum charges I'd actually like to get all my small multifamilies down to just 1 meter. But because the minimum is so high, one thing I have had good luck with is covering the minimum, and invoicing tenants for anything above it. It does create work, but I haven't had any push back at all from tenants about it as long as I'm up front at the start of the least. And because of the extra motivation to keep water use down, they hardly ever actually go over! (Edited to add: If/when I have more rentals in the city of Cleveland, I'll probably cover an average monthly charge and invoice for anything over it. Cleveland water's site is a nightmare but they do provide clear usage data which would be easy to present to a new tenant. Here's the report showing what the average bill is, I'll pay that, I'll invoice you for above-average usage, and we're all set.)
The bigger issue I've had is tenants not reporting running toilets or "small" leaks, even when I contact them to ask because the water bill shot up. A lot of tenants are suspicious of landlords (understandably in Cleveland I think, a lot of tenants get treated terribly) and don't want to seem like a problem or don't want me in their house. What I've started doing is telling tenants at lease renewals, and reminding them whenever we're in contact, that
1. taking care of repairs while they're still small saves me money, so I really do want to hear about the repairs, I won't think they're a nuisance or use it as an excuse to check on their housekeeping, and
2. if they call me in for an early fix on something that will save me money, I'll do a nice little extra for them while I'm there. A leak running for a month in the city of Cleveland can be hundreds of dollars. Upgrading a shower head or kitchen faucet costs maybe $80 and takes 20 minutes, people love it, and it's nice for the next tenant too. Bringing over a big pack of the super strong allergen-preventing furnace filters is much appreciated when people have kids or health problems. Small gestures, builds a lot of trust, gets me a lot more reports of small maintenance issues.
Maybe not feasible for bigger property managers, but for a mom & pop landlord like me managing a few dozen properties, I know all my tenants and properties pretty well and this makes a huge difference. I think of it like websites rewarding white-hat hackers who point out vulnerabilities in their site. :)
@Bob Collett If you find anything out about this let me know. I have been under the understanding that it is virtually useless to try to have tenants pay for water and I have a mixture of Section 8 and cash tenants, in MF as well as SFRs. The closest thing I have done is making sure the exterior spigots are removed from the property and I watch and pay the water and sewer bills myself instead of having my PM do it.
@Brian Garlington. I always have self-pay SFR tenants pay water & sewer. I put it in the lease, and have never had it challenged in court.
The problem with removing exterior spigots, is that the city of Cleveland will issue a violation on the annual inspection and make you install working exterior spigots... especially on the west side.
Bob
You can install low flow shower heads, and use water saving toilets. Also check out using the RUBS System.
Water bills are the bane of my existence, I could ramble about this subject all day. I don't want to do things like remove external spigots, because if tenants have space for a car or garden I want them to get full use from the property. But I've tried a lot of things to handle the bills.
You can make the tenant responsible if they have their own meter, and I've done that in a couple units, but I wouldn't recommend it at all. The issue is that if they don't pay, you as the landlord need to pay the whole back bill and reconnection fee to turn it back on for the next tenant. If I'm dealing with an eviction or less than friendly move out and they were responsible for their own water, I budget $400 for the water. It sucks. The only people I let do that now are inherited tenants who have been paying their own water for years.
For subsidized programs, you can get some utility reimbursement for what you're paying - also often for providing appliances! I have one EDEN tenant in a 3 bedroom house who I pay water/sewer, and provided all appliances. We're in the process of renewing her lease and it looks like I'll be receiving $152 monthly for providing the water and kitchen appliances. That's a big help. I really can't recommend EDEN enough, they're much easier to work with than CMHA, and just on a human level their programs are really reaching the people most in need of stable housing. If you're dealing with apartment buildings, I know Cleveland would love to have more landlords sign on to provide whole buildings of subsidized housing for vulnerable populations like kids aging out of foster care, and I'm sure there would be a lot of subsidies available there. I think they do a quarterly request for proposals on this? It's been a couple years since I looked at it.
On meters - depends if you're really in Cleveland, or Cleveland area, because cities vary. Most of my rentals are in Bedford, which has a ridiculously high minimum monthly charge per meter, $53.91 per month. Only units I have that ever go over are families or have a leak. I have one lot with a 3 bedroom house (family with 2 kids), and three efficiency units, each with a bachelor in them. If you put all three of these guys in 1 unit they still wouldn't go over the minimum. But, because it's 4 units, I pay a minimum of $215.64 for water at that lot every month. And the minimum goes up every year. If I could have it on one meter I think I'd probably be at about $90 a month.
So in Bedford or cities like it with high minimum charges I'd actually like to get all my small multifamilies down to just 1 meter. But because the minimum is so high, one thing I have had good luck with is covering the minimum, and invoicing tenants for anything above it. It does create work, but I haven't had any push back at all from tenants about it as long as I'm up front at the start of the least. And because of the extra motivation to keep water use down, they hardly ever actually go over! (Edited to add: If/when I have more rentals in the city of Cleveland, I'll probably cover an average monthly charge and invoice for anything over it. Cleveland water's site is a nightmare but they do provide clear usage data which would be easy to present to a new tenant. Here's the report showing what the average bill is, I'll pay that, I'll invoice you for above-average usage, and we're all set.)
The bigger issue I've had is tenants not reporting running toilets or "small" leaks, even when I contact them to ask because the water bill shot up. A lot of tenants are suspicious of landlords (understandably in Cleveland I think, a lot of tenants get treated terribly) and don't want to seem like a problem or don't want me in their house. What I've started doing is telling tenants at lease renewals, and reminding them whenever we're in contact, that
1. taking care of repairs while they're still small saves me money, so I really do want to hear about the repairs, I won't think they're a nuisance or use it as an excuse to check on their housekeeping, and
2. if they call me in for an early fix on something that will save me money, I'll do a nice little extra for them while I'm there. A leak running for a month in the city of Cleveland can be hundreds of dollars. Upgrading a shower head or kitchen faucet costs maybe $80 and takes 20 minutes, people love it, and it's nice for the next tenant too. Bringing over a big pack of the super strong allergen-preventing furnace filters is much appreciated when people have kids or health problems. Small gestures, builds a lot of trust, gets me a lot more reports of small maintenance issues.
Maybe not feasible for bigger property managers, but for a mom & pop landlord like me managing a few dozen properties, I know all my tenants and properties pretty well and this makes a huge difference. I think of it like websites rewarding white-hat hackers who point out vulnerabilities in their site. :)
@Gwen Fyfe Thank you for the great feedback. It seems that it would be quite simple and inexpensive to remove those extra sub-meters in the properties where it makes sense for you. A plumber can simply remove the meter and replace it with a T to connect it to the main meter. Then have the water company pick up their meter... unless there is a bunch of paperwork required. If you ever wanted to put the meter back... its already plumbed.
@Gwen Fyfe Thank you for the great feedback. It seems that it would be quite simple and inexpensive to remove those extra sub-meters in the properties where it makes sense for you. A plumber can simply remove the meter and replace it with a T to connect it to the main meter. Then have the water company pick up their meter... unless there is a bunch of paperwork required. If you ever wanted to put the meter back... its already plumbed.
I think so too! Unfortunately Bedford can be a little touchy about this type of change. If you get the right person at the city and they see that you're really trying to do the right thing they can be great to work with, but overall the city isn't very landlord friendly.
For example... For that same property, because it's 4 units, the city calls it an apartment building and I have to pay for my own separate trash service. Everything with fewer than 4 units is covered by the property taxes. I don't get a discount on the (pretty high) property taxes, but I do have an extra $60/month bill, and the city calls me personally to nag me if the city service accidentally empties the trash bins for that property. And it's really not an apartment building! Argued this one with them for two years but I'm still paying that damn $60/month.
So I'm trying to build up lots of goodwill before I ask the city water department to remove those other three meters, ha.
I think the problem is two-fold.
1. Replumb costs - You'd have to re-pipe the cold water supply lines for both units. That would boring out relevant walls and floors which I can't imagine would be less than 4 figures.
2. Competition - I haven't seen a multi in Cleveland for rent with separate water & sewer billed. You'd have to offset the extra bills with lower rent to remain competitive. It may make your income a little more predictable, but it would also extend your payback period for re-plumbing the property.
I've looked into this for some some of my duplexes in Cleveland. I came across one or two providers that can submeter the water bill but it would require manually checking the meter every month or two and back billing the tenants which is just Not reasonable.
The easiest solutions are low flow shower heads and toilets, as well as making sure the sinks have aerators.
You can buy an in line meter of some kind that will alert you of there is a slow leak like a running toilet or dripping sink. That's the stuff the tenants won't tell you about but it will add up. I haven't researched it but know it's out there.
I've also started to bill tenants a per person per month charge on top of the rent to offset the water bill. It doesn't correlate directly to the cost of the water, but it lets you add in another 10-20/person/month to the rent in the form of a water bill.
@Bob Collett I can answer partially #3.
All my tenants pay water & sewer: I bill them according to the bills I get from Cleveland water.
I don’t let them pay bills straight to the CW site - these are charging to my credit cards.
Their payments are always go before the rent (it’s on their lease), so if they late on water payment, they starting getting late fees on rent next month.
If you have submetering - it's easy to bill them. If there is no submeters, then it's not legal to bill them what they didn't incurred. However, if there is no meter (like water is included in HOA fees), some amount, like $20-30 can be included separately ....well, until they take attention to the court.
Most HAO get third party billing company: they install their meters and bill Tenants every month, they take reading via satellite. If it's SFH, it's much easier because CW is billing.
@Irina Belkofer who have you used for sub metering?
Bob
@Irina Belkofer who have you used for sub metering?
Bob
I personally don't but HOA I have my units in, do use.
I know it’s possible and save lots of money to landlords.
For example, one water bill was $550 because Tenants haven’t heard the toilet leaking - Rent is $929 for that unit.
So, if the owner would have to pay water there - that would leave him in red for that month (there is HOA, insurance, taxes etc). Tenant paid for that and now he's watching more carefully all his plumbing devices.
Anyone know if CMHA have water usage limits for tenants? I have a SFR property in Euclid that I am paying $200/month on average for City of Cleveland Water bill. Property management says there are no leaks detected.
I’m solving this by simply raising the rent about 5% per year like clockwork.