Strategies for dividing utility billing

[Matt Zimmerman]

Hey Everyone - 

I have a triplex under contract and am curious on how to approach this situation. The electric is metered by unit but the water is not. Ideally I wouldn't like the tenants to know I'm even paying for the water so they aren't careless. Is there a formula anyone has used to pro rate this cost based off of square footage per unit? Curious on techniques where people have mitigated this issue of being stuck with a large water bill. 

Thanks as always! 

[David Fernandez]

Hi @Matt Zimmerman,

I usually analyze the water bill for the last 12 months (6 minimum) and come up with the average monthly cost. Then I charge a flat fee per person living in each unit to cover the water cost. In my experience, water usage is related more to the number of people living in each unit rather than to the size of the unit. 

My only exception is when some units are significantly different from others (i.e.: if a unit has a washer and others don’t, this unit will pay some extra for water usage). 

But don’t over complicate this. Come up with a fair and easy way (and be consistent!) to bill the tenants for the water bill and then let them know how much they will be paying each month.