Purchasing multifamily without submeters

[Ryan White]

I've read in some forum discussions the downfall of multifamily real estate that lacks utility submeters.  Obviously it eats away at profits if the landlord is paying for certain utilities.  I don't understand why a first order of business wouldn't be to place submeters on the units so that utility bills can be passed through to the tenants.  Is there something I'm missing?

[Mike Hanneman]

Installing submeters is the ideal way to lower expenses by passing the bills on to the tenants, however the expense of the submeters is a big one. Depending on how the utilities are laid out in the units could make this expense go up even higher. In order to install submeters you have to have licensed tradesmen install them most times and the meters themselves can be expesive. If you can cover the costs however you are gaining more value for the property for sure.