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Updated almost 3 years ago,

User Stats

66
Posts
25
Votes
Hoi L.
Pro Member
  • New to Real Estate
  • Chadds Ford, PA
25
Votes |
66
Posts

Need advice on 5-units multi-family: rent, utilities, etc

Hoi L.
Pro Member
  • New to Real Estate
  • Chadds Ford, PA
Posted

Good day fellow members! My family started the REI pathway late 2021 and has closed on 2 SFH, 1 pending SFH, and one 5-unit multi-family house. Some details on the multi-unit located in Glenolden (SW suburb of Philadelphia):

Old (early 1900s), 2700 sq ft, converted to 5 units with 6 separate electric panels/meters

Only 1 gas meter, 1 gas hot water heater, 1 gas furnace heat (old fashioned water radiators)

Tenants on lease (month-to-month) have been there: 15 years, 11 years, 7 years, 2 years, 1 year

Tenants only pay electricity; current landlord/owner pays water/sewer/trash (standard for the area); heat and hot water (only 1 gas line and hot water heater).  With water bill usage that is outrageous (80g/person-daily; no laundry in house!), and monthly gas is >$200/month and water >$275/month.  Already planning to replace every old toilet in the home to newer low volume/high efficient models.

Their rents (two 1-bedrooms, two efficiencies (one definitely is easily converted to one bedroom), one 2-bedroom) are all under rented (currently $710-810/unit: market is $850-950 and higher per rent-o-meter)

Big question regarding rent: the tenants did not have rent increased for past 2 years (usually built in $10/yr), and I am planning to increase rent on 7/1/2022 by ~$50/unit (6-7%) after my acquisition on 3/28/2022.  Is this too much?  Do I need to justify with showing them the bills to water and gas?

Big question regarding utilities:

1. Should I also install electric tankless water heaters to each unit?  Or hire a plumber/electrician to separate the basement gas hot water heater to 5 separate electric hot water heaters?

2. Would changing out the gas stoves (4 out of 5 are gas) to electric be worth it?

3. Should I install community laundry to the basement?  The long-term (15 years) tenants asked about it and she says it would be the biggest improvement to the house, "Even if it is coin-operated, you would make it back in no time".

4. Is it worth separating out the gas line to 5-6 and let tenants take over the gas bill?

thanks for all and any advice-help

  • Hoi L.
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