Is it worth it to meter my 12 unit complex separately for water?

[Jake Peetz]

I purchased my first multifamily property - it is a 12 unit property. None of the units are metered separately for water and the previous owner paid the water bill for the tenants and included in the rent. I wanted to get thoughts from the BP community on the value of metering them separately. It will cost roughly 2k per unit, we are doing a full renovation on the property - new plumbing so we are doing work anyway. Just wanted to get some thoughts or advice on the value of that rather than paying the water bill and adding to the charged rent. The property is a total rehab value add, my thought was metering separately could boost my NOI which will help my valuation down the road. Any feedback is greatly appreciated.

[Gino Barbaro]

@Jake Peetz

If you are doing the rehab now, I would spend the 24k and be done with it. No billing back to the tenants, and the water usage will definitely go down if they are paying it themselves.

If you can save $50 per unit per month per unit, that a $7,200 savings annually. You just added $144,000 in value to the property at a 5 cap.

Good luck

Gino