How to Split Water Bill for Duplex with Single Meter

Question

Currently, there's only one water meter for the entire duplex, and historically, I've been responsible for paying the water bills every month.

However, I believe it's time to transition to a system where the water bill is split between the two tenants. I'm seeking advice on the best way to implement this fairly and effectively.

Here are a few options I've considered:

• Submetering: Installing individual water meters for each unit could be a solution, allowing each tenant to be billed based on their usage. However, this might involve significant upfront costs and logistical challenges. Has anyone successfully implemented submetering in a similar situation?
• Equally Splitting the Bill: One straightforward approach could be to divide the total water bill evenly between the two units each month. While this might seem fair on the surface, it may not accurately reflect each tenant's actual water usage.
• Usage-Based Billing: Implementing a system where tenants are billed based on their actual water consumption could be fairer. However, without individual meters, accurately measuring usage for each unit could be challenging. Are there any practical methods for implementing usage-based billing without submetering?
• Including Water in Rent: Another option is to adjust the rent for each unit to include the cost of water. While this simplifies billing, it may not be the most transparent or equitable solution.

I'd greatly appreciate any insights, experiences, or alternative solutions that members of the community have to offer. How have you handled similar situations in your rental properties? What strategies have you found to be most effective in fairly splitting utility costs among tenants?

Thank you in advance for your help and guidance!

Erick Salvatierra · Answer

Hi Hares, Erick from Chicago here. I have two properties that are currently submetered and here has been my experience with the options you're considering.

- Submetering - I went through the process for one of my buildings (gas and electric). There is a lot of new services out there that easy the process of installation but it is expensive. Just to get started here in Chicago, there is a process through ComEd to assess, inspect, and permit submeters that took me 4 months to approve and install. Good in the long term so I didn't have to worry about the utility bill but like you mentioned - high upfront costs and time consuming. - Equal Splitting (ratio utility billing) - What I've heard from lawyer friends who practice real estate law is a trending spike in resident issues. With people working from home more these days, an equal split in costs, doesn't mean an equal split in use. It's a very manual process that is often not transparent. - Usage-Based: I've mainly seen hardware solutions here like plug sensors and electrical sensors. This is the best solution I've seen (https://www.amazon.com/gp/product/B075K6PHJ9/ref=as_li_tl?ie...) . I have also heard concerns about removal and tampering with these devices. - Water: I'm currently including water in rent for both of my buildings, because I've luckily not had to meter my water use. I get a standard bill from the city every month which makes it easy to allocate.

I've recently started building a software application in utility management because I think there is an issue with potential earning lose due to overlooked measures. Specifically around efficiency in devices when not maintained and challenges with realizing potential earnings with device electrification upgrades. We want to take the complexity out of this decision making process in order to support cost control and finding monetization opportunities for properties that have fully electrified.

Happy to connect!

Brandon Rizzo · Answer

Check your state's Municipal code for utility submetering it could affect your strategy and direct which method to pursue. For example a common one in Multi-Family is RUBS. There are other methods such as sq ft percentage of use. Whatver you decide, you'll want to ensure the proper addendum is attached to the lease to specifically outline how utilities are handled and charged if charging tenants.

Alecia Loveless · Answer

@Hares Najand in a lot of markets including mine it is customary for the landlord to pay the water and sewer bills. If you don’t already know, find out what is typical in your area.

In my area it is common for landlords to pay for heat which promotes a lot of abuse with the system in that tenants keep the heat at unreasonably high temperatures and often open the windows in the dead of winter when it can be -20 out.

I’ve turned into an outlier in that I’m switching all

My buildings over to tenant paid heat, but I have to have lower rent amounts to compensate. It diminishes my tenant pool which you may find with Submetering the water bill.

Hares Najand · Answer

Thanks for your reply.  I ended up just getting a second hot water tank & sub-metering.  Was more than I wanted to spend but is slowly paying for itself not having to pay the utilities for the units.  Thanks!

Vicente Hernandez · Answer

Hey Erick, amazing breakdown. I was lucky I found this post. I had similar questions for a client of mine who is looking into splitting his water usage amount 2 units. Thanks for this!

Brie Schmidt · Answer

Is that common in your area?  Be prepared to lower your rent below you competitors who include water in their rent to stay competitive.  I have owned 30+ properties with 1 split meter and never saw the point in doing it as I would have to pay thousands to meter it out and then lower rent to be competitive with everyone else

How to Split Water Bill for Duplex with Single Meter

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