All electric duplex - landlord pays all electric ?

[Stephen S.]

I am looking for some opinions (from all of you. <g>)

This all-electric duplex was owner & tenant occupied until now. Apparently there was some agreement between the former owner and the former tenant to sort out the electric bills between them. There is a single service and a single meter and no easy way to split the electric circuits inside the house. So . . . I ponder how to manage the electric bills.

What do you all think of the idea of me, as the landlord, simply paying for all the electric? On one hand I feel like it would create a serious dis-inventive to conserve electrical use by the tenants. <g> Although; me being a very clever mechanical contractor - I could fairly easily arrange to limit the use of the heat and A/C to sensible comfort levels. And in un-defeatable ways. <g>

I guess I could get the previous bills from the utility company, average them for the year, and using a per-square-foot basis; increase the monthly rent charge for each portion of the property to cover 110% of that cost. Not that it matters - but the 'apartment' sizes are about a 2/3 - 1/3 split

And of course; then I would re-assess at the end of each lease period to see if I was coming out at least even on the deal.

Do you think that advertising: "Landlord pays all utilities" or something like that, would create an added incentive in terms of renting the units? Even though, obviously; the rent would be higher than a comparable unit. <g>

Would you be willing to rent it as I've described?

Can you think of any better ways to manage the issue?

stephen

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[Brandon Turner]

I like the idea of averaging, but I just hate these kind of arrangements. Tenants will crank their heat to 85 all winter and AC to 55 in the summer ... and leave their windows open the whole time.  

I don't think I'd force their heat levels either though- they'll just complain all the time. 

So... I think I'd be most inclined to do this: At the end of every month, look at the bill. Split it in 3rd. You pay 1/3, and each of them pay 1/3. This way, even if one tenant used more or less, your 1/3 would still most likely cover what they would have had to pay anyways. That might be a bit of a logistical mess, but it's an option. 

OR... how tough would it be to just separate the wiring? 

[Bill S.]

It's my experience that you never recover the cost of utilities paid by owner via "increased rent" I prorate based on square footage and put that in the lease and back bill the tenants. I don't like it. It's brain damage and I'm always chasing the reimbursement but so far I've gotten it.  I really hate this arrangement and I would do a change out but the best use of the property is the land for development. I know as soon as I sink the $4k-$6K into it for electrical upgrades that someone will buy the property from me and my money will go to waste.

What about converting the heat to nat gas? The electric only becomes an issue when they run the AC any you could probably monitor that and bill them accordingly.

[Stephen S.]

No question:  I could just rewire the entire house - but I'd like to avoid doing that. <g>

I can limit the heat and A/C use by controlling the return air temps.  Of course you are right - I can't control the open windows.

Although I did do that for my own children.  My kids lived primarily in the second floor of a large house.  I almost never went up there.  So they would feel slightly hot or cold and just turn the A/C or heat.  Windows?  Who cares?  Several times I would see the windows open on a 90+ degree day - with the A/C running full tilt.  So I had my alarm guy come and wire all the windows up there - but not to the alarm panel, just to a relay.  So any time the windows were open - no control power to the heat or A/C.  The kids figured out very quickly not to complain to me about the systems not working. <g>

I guess I could do that for the tenants but I'n trying to keep this as simple as possible. 

stephen
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  Originally posted by @Brandon Turner:

I like the idea of averaging, but I just hate these kind of arrangements. Tenants will crank their heat to 85 all winter and AC to 55 in the summer ... and leave their windows open the whole time.  

I don't think I'd force their heat levels either though- they'll just complain all the time. 

So... I think I'd be most inclined to do this: At the end of every month, look at the bill. Split it in 3rd. You pay 1/3, and each of them pay 1/3. This way, even if one tenant used more or less, your 1/3 would still most likely cover what they would have had to pay anyways. That might be a bit of a logistical mess, but it's an option. 

OR... how tough would it be to just separate the wiring? 

[Stephen S.]

There is no gas - it's south Florida:  the land of electric heat. <g>

I agree:  no matter what I think of - it seems like a hassle to me.  I was just hoping that someone here had come up with a magically wonderful solution I could use.

stephen
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  Originally posted by @Bill S.:

It's my experience that you never recover the cost of utilities paid by owner via "increased rent" I prorate based on square footage and put that in the lease and back bill the tenants. I don't like it. It's brain damage and I'm always chasing the reimbursement but so far I've gotten it.  I really hate this arrangement and I would do a change out but the best use of the property is the land for development. I know as soon as I sink the $4k-$6K into it for electrical upgrades that someone will buy the property from me and my money will go to waste.

What about converting the heat to nat gas? The electric only becomes an issue when they run the AC any you could probably monitor that and bill them accordingly.