Second water meter in a duplex

[Jeff S.]

Old Portland duplex with single water line. Have owned many years and always wanted to add a second line but the cost.

Would you EVER consider spending $17,800 to save $2493 per year in water cost?  We do know that water will keep going up. The payback is around 7 years.

Yes I know about submetering and all but trying to keep track of all that lots of work.

[Greg Scott]

If you are renting out one or both sides, you can bill back for water usage, even without a second meter.  If you don't want to split it by some formula, such as number of people, you could always charge a flat rate.  

If you did the either of the above, there doesn't seem to be much savings at all.  How do you get to $2,493?   You would probably have a much bigger benefit from low-flow water fixtures.

[Jeff S.]

@Greg Scott $2493 was my water bill for the entire year.

[Elias Halvorson]

I would do it for the tax write offs, as well as another positive for the resale value. 

[Eric Koelling]

Quote from @Jeff S.:

Old Portland duplex with single water line. Have owned many years and always wanted to add a second line but the cost.

Would you EVER consider spending $17,800 to save $2493 per year in water cost?  We do know that water will keep going up. The payback is around 7 years.

Yes I know about submetering and all but trying to keep track of all that lots of work.

 Out of curiosity, were you quoted $17,800 by a company? If yes, which company?

[Jonathan R McLaughlin]

A bit long on the payback but add in any value increase to the property from doing it, including its increased attractiveness to condo conversion down the line, immediately better cap rate, etc...and it could be worth it.  Also, water prices aren't going down. Price seems high but no data there.

Certainly a better use than paying taxes if you have the cash. 

And are they likely to ban such changes in the future?

[Stuart Udis]

Is the entire water bill usage? Here in Philadelphia the water bills are split into two line items, usage and storm water collection. The storm water collection is based on the size of the parcel  with some relief given if there’s storm water management systems on site (usually only applicable for larger sites where developments were required to implement such systems). However if you’re in a municipality that charges for storm water, how does that get allocated between two metered water accounts? That’s the one question I have. 

My advice would be to  charge each tenant a flat $100 water fee. Separately metered gas & electric are generally viewed as more valuable because water is less commonly metered. If you feel you can bill separately for water if metered you should have no issue simply adding a flat water fee and I’d imagine the $17,800  could go a long way in a 2 unit building for upgrades that would have a greater impact on revenue. Does the building have central air? Are the kitchens and bathrooms updated? Do the closets have nice organization storage? If the building does not have direct access into each unit is there a remote access system for tenants to allow guests in? These are areas where I find I can generate best return on my building Improvements & that’s where I’d recommend you focus any spending. 

[Marcus Auerbach]

Your ROI assumption is that when you divide the lines, the tenants will pay for it. That's a big IF. You could simply put in the lease that each will pay half and save the $17,800.

[Jeff S.]

@Eric Koelling from the city system development charge for a 5/8” meter $4791, install fee city 8475 and 4500 for the plumber to run from meter to house.

[Jeff S.]

@Stuart Udis multiple charges including water, sewer and storm water.

I have charged separately in the past then they grumble when one uses lots of water gardening or whatever.

Have a vacancy coming up which is rare and an opportunity to improve the place wherever needed.

[Marcus Auerbach]

Turnover is always an opportunity to improve, but the goal should be better tenants and/or higher rents. 

Typical cosmetic (lifestyle) upgrades we do are better/more LED lighting, dimmers, flooring, paint, trim, solid wood door slabs in place of the hollow core etc. And if you have a bigger budget: kitchens and bathrooms. 

Anything that creates a better experience for a tenant. A secondary consideration is also resale value.

[Karolina Powell]

As a landlord, I just bill back the water bill based on the amount of occupants per side.  As a purchaser, I really like when a property already has utilities that are split but I wouldn't pay a 20K premium to do it.  Therefore my vote on this is no.

[Alan Asriants]

Quote from @Stuart Udis:

Is the entire water bill usage? Here in Philadelphia the water bills are split into two line items, usage and storm water collection. The storm water collection is based on the size of the parcel  with some relief given if there’s storm water management systems on site (usually only applicable for larger sites where developments were required to implement such systems). However if you’re in a municipality that charges for storm water, how does that get allocated between two metered water accounts? That’s the one question I have. 

My advice would be to  charge each tenant a flat $100 water fee. Separately metered gas & electric are generally viewed as more valuable because water is less commonly metered. If you feel you can bill separately for water if metered you should have no issue simply adding a flat water fee and I’d imagine the $17,800  could go a long way in a 2 unit building for upgrades that would have a greater impact on revenue. Does the building have central air? Are the kitchens and bathrooms updated? Do the closets have nice organization storage? If the building does not have direct access into each unit is there a remote access system for tenants to allow guests in? These are areas where I find I can generate best return on my building Improvements & that’s where I’d recommend you focus any spending. 

 I am also from the Phila area and really there is only 1 water line in 99% of mulit family homes. 

Hot water is usually separated it is just the cold water that is often not.

For a very large building a flat fee is the move because the back billing and tracking of who paid for what would be hectic, but for a small MF like a duplex it is very easy.

I split the bill by the fractional amount of people who live in the unit.

In other words, the amount of people that live in the unit divided by the total amount of people living in the builidng.

So if there are 3 people upstairs and 2 people downstairs.

the upstairs pays 3/5 of the bill, and downstairs pays 2/5.

No need to separate anything, you know the tenants will cover 100% of the bill and this approach is fair. 

A flat fee can be good, and with $100/unit in our area you are highly likely to cover the bill and even have money left over, but you do run some risk of paying a difference.