Just got our first water bill... so let's talk about Sub-Metering

[Lucas Bennett]

Dear BP Family, 

I know this isn't the most flashy of topics, but here is the situation I am in: 

My company recently purchased a 7-unit property in Portland, OR (Keyword alert: 'Portland' is being discussed on biggerpockets  :)  ), and due to the fact that the building is older, the water utility is master-metered. Anyone familiar with Portland knows that the water/sewer system is a mess, and we just received our first water/sewer bill, which was quite large, to say the least. 

I recently found out about sub-metering, and I would like to ask the investors/landlords on the site a couple questions.

1. I understand that we will still receive/pay the master-metered water bill from the city, and that the sub-metering company will bill the units directly and mail us the money (sans their cut), BUT how do you enforce the new water utility bill with the individual tenants. If one unit doesn't pay the bill we can't shut the water off JUST to their unit, obviously. Should we write a new lease contract, including the sub-metered water utility, so if they don't pay it then we can start the eviction process, like it works with rent? Have you all had good success with this process? Are there better options?

2. Anyone have any good suggestions for Sub-metering companies? I spoke at length with a company called Guardian Water & Power, and they seemed very legitimate with what I would consider decent prices, but I'd love to hear who you all are using. 

Also, if anyone on the site has other alternatives to sub-metering I would love to hear them!  

Thank you all in advance

Lucas

[Lucas Bennett]

@Zach Schwarzmiller Yes we have been using Guardian Water & Power for the last 3 years or so. Only problem we've ever had with them is when the City came in and changed the cover to our water meter on the street; Guardian couldn't open it to check the numbers. That has since been rectified. 

We get an email every month to release the bills to the tenants, so we can check the bills before they send them out for us. I did hear from another BiggerPockets member who saw this thread and called me that Guardian now requires you to have a certain number of units before they will release the bills for you. So you may have to print and send the bills yourself with if you only water 5 of your units metered by them. Apparently we set up our account with them early enough that we are grandfathered in. However, I've never checked with Guardian about this. I'm sure they are reading this so maybe they can chime in. 

There is an online portal to pay as well, so if your tenants are computer savvy enough they can pay online. I think the rules around how you can bill your tenants for utilities is different in every state, but I'm sure they'd walk you through your options with them. 

Conversely, you should check if there are ways to bill your tenants that is easier than sub metering. I believe some cities/counties/states allow you to divide your master utility a certain way among your units. Don't quote me on that, but I would definitely look into that before you pull the trigger on sub-metering.

If you do sub-meter, I think Guardian could definitely work for you.