Separate meters

[Kelli Hatch]

Any advice or thoughts on multi-families that are NOT separately metered? Some people steer clear of them while others don't seem to mind.  Or do most people see it that as long as the numbers work then it shouldn't be an issue?   

[Jered Sturm]

@Kelli Hatch I try to avoid them. That doesn't mean I wouldn't buy them, but currently, our entire portfolio all utilities are submetered even on our 42 unit. 

I would disagree with Austin on this one I think you have to take into account the future projections of utility costs as well. The majority of our portfolio is in Cincinnati Ohio. I have attached a graph of the water cost in Cincinnati over the past 30 years. This increase in water costs will only make sub metered buildings more and more in demand and non-submetered less and less this means cap rates will compress for submetered in comparison to increasing for non-submetered. You can say you will just bill back to the residents, but that's not always feasible in some markets and we know that total water consumption decreases 30+% when residents are responsible for actual amount used not just a fixed bill back. This means less cost on the owner but not as much financial burden on the resident. 

Good luck in your search!