Utilities covered by landlord

[Stephen Watkins]

So I'm looking at two properties, one a triplex the other a duplex, with shared utilities between the units respectively. The current owners have been paying utilities. They are sending me the averages this week. I'll also do my due dillegence checking on them too of course. Is there any way I can insulate myself from spikes caused by tenants? I know I could separate meters but that would be last resort.

[Tom Sylvester]

Most of our units have the tenants paying utilities, but we have a few that we pay utilities (because we have not split them yet). Here are some recommendations.

• Separate the Meters - I would recommend this on all units. That way, you don't have to worry about the issue.
• Install Devices to Prevent Spikes - In one of the towns we invest in, the landlord is required to pay for water. We had an issue a few times where the toilet was running, but the tenants never reported it to us. So 3 months later we ended up with a very high water bill. We ended up finding a part for ~$13 at Home Depot that would prevent the toilet from running. For something like heat, you may be able to install a thermostat that limits how high the tenant can set the temperature. I have not done this one and would definitely look into local regulations.
• Establish Report with Tenants - We have found that if we keep our places nice and are cordial to our tenants they want to stay in our properties. Doing things like having very high utilities bills is one way to make us look twice at renewing their lease.

@Michaela G. - I would be careful about this approach and check with local laws. I believe this practice could be illegal in some areas.