I'm getting ready to move (and will have to move again in 1-2 years due to military orders) and was looking to buy a SFR or duplex to convert to a rental when my tour is up in the area. When looking I found a house that looks somewhat promising, but currently has solar on the roof that the seller is renting and the buyer would have to assume. So my question is what would the more experienced landlords do with this property? Would it be wise to assume the solar contract and have future tenants pay for it? or try to find a way out of it? or not even consider the property? The current owners say it saves them a net $60 per month.
Rental Property Investor · MN · Member since 2018 · 20 posts · 10 votes
6y
If you plan on buying the property I would recommend charging a fixed rate to the tenant monthly at the current cost of electricity in your market that way you can make a little extra above what the lease payment is. (A side note: one thing a lot of landlords don't think about is how hard it can be for a tenant to swallow a $300+ electric bill in the heat of summer when the AC Doesn't turn off. Flattening that out to a fixed payment has gotten great feedback from tenants.) Then you can either transfer the remaining utility bill over to the new tenants so they pay any overage above the fixed cost (easiest) or charge the tenant an overage to compensate for any difference (makes more money but a little more work).