Investor · Chicago, IL · Member since 2014 · 169 posts · 29 votes
Hello everyone,
I'll try to make a long story short here. I recently had a tenant who I could hear running the water for long amounts of times (15 minutes or more). After the third time in three weeks I asked them what they were doing and it turns out they were cleaning the bathroom but just kept the water running the whole time. I let them know that I appreciate them keeping up with the cleaning but asked them to start filling a bucket to do the cleaning and explained that water is expensive as well as a luxury here in Chicago (I know people in California who can't even water their gardens). When the next water bill came it was over $100 more than the average bill which I paid and didn't say anything to them and since there hasn't been any excessive usage that I am aware of.
Cut to today, I have another unit to rent and a family came to look at it. There were a few red flags that I noticed:
- Before the appointment was set up they asked if laundry was free (I have shared free laundry in the building). Not a big deal but...
- During the viewing they asked if I had any plans of changing to coin operated because their last landlord made the change during their time there.
- They mentioned that they do a lot of laundry because they have two children.
Now I may be overreacting here but has anyone ever put it a stipulation in a lease that if water usage goes above a certain point (say the average over the past 6-10 bills) then a tenant has to pay extra? They seemed like a great fit but I can't stop thinking about worst case scenario that my water bill doubles once they move in.
Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
4y
Hey @Account Closed - That stinks, people in general who don't appreciate the luxuries we have here in US bother me. Water being one of those luxuries and like you said people in Cali can't even water gardens, but people in Africa don't even have CLEAN water.
I am not sure there's a way to educate people better on how to appreciate what they have, but I'd definitely like to figure out how.
I've never put any language in the lease about water usage, but in your case, I think it's fair for you to include that language in your lease.
It stinks in Chicago that landlords pay for water....hopefully we can somehow change that.
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
4y
@Account Closed water usage is one of the toughest things here in Chicago. One of the three units we run in Berwyn had astronomical water bills all throughout the pandemic. We also had one particularly... fun tenant who needed to be evicted. As soon as that tenant was out, the water bills dropped $750 per 2 months of usage. This tenant literally would leave the water running for no reason.
There is no managing that type of tenant. You simply have to move on. Go with your gut on this one (and install coin operated laundry too!).
Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
4y
Quote from @Account Closed:
Hello everyone,
I'll try to make a long story short here. I recently had a tenant who I could hear running the water for long amounts of times (15 minutes or more). After the third time in three weeks I asked them what they were doing and it turns out they were cleaning the bathroom but just kept the water running the whole time. I let them know that I appreciate them keeping up with the cleaning but asked them to start filling a bucket to do the cleaning and explained that water is expensive as well as a luxury here in Chicago (I know people in California who can't even water their gardens). When the next water bill came it was over $100 more than the average bill which I paid and didn't say anything to them and since there hasn't been any excessive usage that I am aware of.
Cut to today, I have another unit to rent and a family came to look at it. There were a few red flags that I noticed:
- Before the appointment was set up they asked if laundry was free (I have shared free laundry in the building). Not a big deal but...
- During the viewing they asked if I had any plans of changing to coin operated because their last landlord made the change during their time there.
- They mentioned that they do a lot of laundry because they have two children.
Now I may be overreacting here but has anyone ever put it a stipulation in a lease that if water usage goes above a certain point (say the average over the past 6-10 bills) then a tenant has to pay extra? They seemed like a great fit but I can't stop thinking about worst case scenario that my water bill doubles once they move in.
Thanks,
Tim
We have a corporate client that We help acquire properties (Single family and commericial). For the single family homes their leases require the tenant to pay the water bill. For their multifamily homes their leases include a prorated water bill item. All of their properties with laundries are coin operated. Bottom line- This is a business, not a charity. My recommendation- Change your laundery to coin operated. When you renew your leases & increase the rent consider the water expense. You naturally must stay competitive on what your charging for rent. This is what we do.
I'll try to make a long story short here. I recently had a tenant who I could hear running the water for long amounts of times (15 minutes or more). After the third time in three weeks I asked them what they were doing and it turns out they were cleaning the bathroom but just kept the water running the whole time. I let them know that I appreciate them keeping up with the cleaning but asked them to start filling a bucket to do the cleaning and explained that water is expensive as well as a luxury here in Chicago (I know people in California who can't even water their gardens). When the next water bill came it was over $100 more than the average bill which I paid and didn't say anything to them and since there hasn't been any excessive usage that I am aware of.
Cut to today, I have another unit to rent and a family came to look at it. There were a few red flags that I noticed:
- Before the appointment was set up they asked if laundry was free (I have shared free laundry in the building). Not a big deal but...
- During the viewing they asked if I had any plans of changing to coin operated because their last landlord made the change during their time there.
- They mentioned that they do a lot of laundry because they have two children.
Now I may be overreacting here but has anyone ever put it a stipulation in a lease that if water usage goes above a certain point (say the average over the past 6-10 bills) then a tenant has to pay extra? They seemed like a great fit but I can't stop thinking about worst case scenario that my water bill doubles once they move in.
Thanks,
Tim
We have a corporate client that We help acquire properties (Single family and commericial). For the single family homes their leases require the tenant to pay the water bill. For their multifamily homes their leases include a prorated water bill item. All of their properties with laundries are coin operated. Bottom line- This is a business, not a charity. My recommendation- Change your laundery to coin operated. When you renew your leases & increase the rent consider the water expense. You naturally must stay competitive on what your charging for rent. This is what we do.
In one of the towns I have a rental they made a switch to water has to be in owners name. I used to have all utilities for tenants to deal with. So with new tenant I put in that they have a $75 dollar budget of water and if go over they pay difference. First month was $74 dollars, month 2 was $95 so they paid extra in rent.
If this an apartment with shared water maybe look into metering units yourself and billing tenants over an average amount. Or just charge extra rent to cover. My niece lives in one of my units, she washes dishes with water continuously running, at least she did until she got her first $150 water bill which is a 1/3 of her total rent.
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
HOW TO SHARE UTILITIES 101
You have a property with two or more units and the utility meters are shared. There are a few options.
1. Pay to separately meter the utility. This can be very expensive and is usually the worst choice to make because you can't justify the cost.
2. Charge the tenants a higher rent rate and include utilities with their rent. This is the simplest method, but it also means your tenants are more likely to abuse the utilities by leaving windows open with the heat or A/C running, leaving lights on, ignoring the toilet that constantly flushes on its own, etc.
3. Pay the bill yourself, then reimburse yourself by charging the tenants based on a formula. This takes a little more work, but it's the most fair and reduces the likelihood of tenants that squander utilities.
If you choose #2 or #3, there are considerations:
Start with an average. Use varies throughout the year. Heating costs go up in winter, as does electric due to the reduced natural light and people being indoors more. Electric can also spike in the summer with A/C. Contact the utility provider and get an historical average based on the last year of use. It won't be 100% accurate, but it will be close enough. I recommend you do this each year to adjust for utility increases and other variables. If your average heating bill is $150, you may not collect enough in the winter months when the bill reaches $225 but you'll collect extra in the summer when it drops to $65. If you base your tenant charges on the historical average, you should come very close to collecting the entire amount over a one-year period.
Charge a higher rate. If the water bill is $100 a month, increase the price by 20% (or whatever you decide is fair) to compensate you for the time required to split and bill and to cover additional use when tenants squander the utility. If the bill is $100 a month split between four units, increase it to $120 and charge each tenant $30.
How to calculate charges. Don't make it harder than it has to be. If you have four 2bed/1bath units with the same appliances, split it four ways and call it a day. You can make minor adjustments based on the type of appliances (dishwasher, clothes washer and dryer, air conditioning, etc.) and the size of the rental. If Apartment A is a 2bed/1bath with washer/dryer and Apartment B is a 1bed/1bath with no washer/dryer, Apartment A should pay a higher rate. Another option is to split the cost based on the number of occupants in each unit but this also means you'll need to adjust the charges as tenants move in/out, so it requires more work and I wouldn't recommend it. I recommend a simple spreadsheet to check your math and it will make it simple to adjust each year.
End the complaints. Tenants may complain about your method of calculating how much each unit pays. They think it's unfair because they only shower once a week but they can hear the upstairs neighbor showering twice a day. You can put an end to this by showing them an actual utility bill. Why? Because a large percentage of the charges are base fees that do not change based on use!
I just looked at a utility bill and it has a total charge of $184.12 but $116.50 is from base fees! If I divide this bill by four units, each tenant would pay $46.03. If they were separately metered, each tenant would pay the $116.50 base fees and their individual use, which would be 3x higher than what they pay when sharing a meter.
There are a lot of options out there, but don't make it more complicated than it needs to be. Tenants actually save money when using a shared meter, so there's plenty of room for error when calculating how to distribute the charges.
Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
4y
Hey @Account Closed - That stinks, people in general who don't appreciate the luxuries we have here in US bother me. Water being one of those luxuries and like you said people in Cali can't even water gardens, but people in Africa don't even have CLEAN water.
I am not sure there's a way to educate people better on how to appreciate what they have, but I'd definitely like to figure out how.
I've never put any language in the lease about water usage, but in your case, I think it's fair for you to include that language in your lease.
It stinks in Chicago that landlords pay for water....hopefully we can somehow change that.
Calumet City, IL · Member since 2014 · 312 posts · 49 votes
4y
There are a lot of ways to approach this. As soon as I buy a property every toilet and faucet is checked. Everyone gets a new toilet flapper and I may even change a wax ring or two. The faucets are checked for leaks. They are replaced if needed. I pay the water bill for all of my properties and understand how quickly the cost can get out of hand when you have a careless tenant. I also put reduced or low flow shower heads in all of the bathrooms. Somewhere between 1.75-2.0 gallons per minute. As soon as I get a slightly high bill my maintenance guy is notified to check every water source (bathroom and kitchen) in the building.
