First MultiFamily, worth it to install separate utils?

[Tom Weismann]

BP Community,

I'm a new member looking to make my first REI. I'm considering a particular 3 family as an owner/occupant. The heating & hot water system needs replacing and currently runs on one system for the whole property. All utilities are included in current rents, and all units are rented TAW.

Is it worth it to install separate utility systems and meters since I have to replace the current system anyway?  My thought here is that the people will already be on-site and most of the incremental cost will be the systems themselves.  I would like to avoid the unknown utility bill, especially in an area that typically necessitates either A/C or heat for much of the year.

If I'm leaving out critical context, just ask.

Thank you,

Tom

[Brandon Ingegneri]

@Tom Weismann

Overall, I would say separate anything that you can.  Its going to save you money in the long run if this is a hold, and it will make it more marketable if you are looking to sell it.  This really all depends on a few things though other than those generalized blanket statements that I just made. Separating utilities depending on the layout of the house is going to be very costly.  If you have multiple units on one system, and this being New England, I'm guessing it is an older building, you are most likely going to have to open up walls, and replace a lot of the supply and return lines so that they make home runs to individual boilers, etc that you will be installing.  Having good chases will help to reduce some cost.  As far as electrical, your going to need an upgraded service if you want to separate the utilities.  You'll want 3 meters plus a house meter for common areas.  I don't know the exact situation with this particular property, but mechanicals and electrical will be two of your largest expenses, but they will definitely add value and organize the situation.