Electric Meters - How difficult to split them up?

Question

Hey there. I'm new to REI and am working on finding a good deal for my first investment. I've come across a property that I like and that appears, at least initial numbers, to look like it might be a good deal. It's a duplex that has only 1 electric meter.

Would you split the meters up? And from you experience how difficult is it to split the meters up? Why or why not would help.

Thanks everyone!

Wesley W. · Answer

I've had estimates has high as $10K for this kind of thing, and like @Jd Martinsaid, it is absolutely a benefit to you if this is a long term hold. I looked at a duplex recently that had one meter and the utilites were paid by the landlord, and there were 5 window air conditioners running with the doors and windows wide open.

David Krulac · Answer

we've split electric meters as well as gas meters, our goal is to pay the least utilities as possible. Get an estimate from a licensed local electrical contractor. Prices can vary in different areas.

Sarah Ziehr · Answer

I was at a legal 2 flat yesterday and the listing broker said it is about a $4k job to split the panel for a 3rd unit. I know that to update the electrical in a single family it is $5k on the high end.

Joe Splitrock · Answer

You really need to get a quote for this because it depends on several factors:- Location code requirements and local rates- Age of home and location of boxes- Are there two separate electrical panels or does a panel need to be added? It becomes a major issue if there is only one panel. Two panels is not so bad.- Common areas and how to handle that. Some duplex don't really have common areas, but if you do then you need to figure out how to meter that power. If it is something like an outside outlet, you may be able to assign it to one tenant or the other. If it was a laundry room, you are probably stuck putting it on a third meter. Avoid a 3rd meter if possible.I would highly recommend splitting this if you can. Even if it costs several thousand dollars, it could eliminate headaches down the road. For example when one tenant runs their air conditioner like crazy and runs the bill up for the other tenant. You will be stuck in the middle. It is worth $4K to avoid that, trust me!

Account Closed · Answer

It can be expensive if you have to relocate the meters due to code changes, but if it's just a matter of adding a meter to the same location and you don't have to re-wire any circuits, it probably won't be $5k, for example. Get multiple bids because electricians vary wildly. Another option is submetering. I'm surprised no one mentioned it. That's what many new large apartment complexes do. A separate company sub-meters all the electrical and bills the tenants directly. There are multiple ways to submeter (including reading the analog meter yourself each month, wirelessly connecting to a separate service, etc.) but it should be less expensive than putting in new meters. I'm probably going to submeter when I add a third unit to one of my duplexes, because adding a meter would require me to move all the meters to the side of the building from the back, which would cost me ~$12k. I don't know which submeter to buy or anything more than the fact that I'll submeter. If you do some research and find a good/cost-effective method for a duplex, please update us here.If you plan to sell the building at some point, it may be worth putting in new meters.

JD Martin · Answer

Yes, I would split the meters, if I planned to keep the unit long term. You always, always, always want to have each tenant paying their own utilities whenever possible, and it's a more attractive setup to future investors if/when you want to sell. From a landlord perspective, the only reason you would want to be responsible for utilities is if the utility can place a lien on your property if they are unpaid. In those cases, you want to run some kind of interference to prevent the utilities from going unpaid so long as to cause you financial hardship. Otherwise, you want the utility payment relationship to be between the tenant and the utility.

Mark Holencik · Answer

You would probably need to put in 3 meters. Any outside lighting, common areas, and the basement with the heating system will need to be on a meter for the owner, plus 1 for each unit. Splitting up the wiring can be a major project in itself. The outlets from each living room may be wired together. Finding where to split up each circuit can be a major cost in itself.

David Miner · Answer

Spencer - you don't have to split the meters up, but then you're dealing with assessing an estimate of the electric costs to each side almost like common area costs on commercial properties. While I still don't have an accurate answer, I have to believe a good place to start is with the utility.

Jeff Bosaw · Answer

Sorry to bring up an old post. "Another option is submetering. I'm surprised no one mentioned it. That's what many new large apartment complexes do. A separate company sub-meters all the electrical and bills the tenants directly. There are multiple ways to submeter (including reading the analog meter yourself each month, wirelessly connecting to a separate service, etc.) but it should be less expensive than putting in new meters." I have been recently looking into doing just the opposite to convert from a split meter back to a single meter with submetering. This is the only way it seems possible to put solar on a multi-family rental property and get paid back by the tenants. It kind of sucks that the utility company won't just let owners put both units into one name or account and charge the tenants for energy used as if you are the utility company midway through the month. It would be much easier if you could earn credits for the second property by providing extra power from solar on just 1 meter. Would be even better if you could use it for another property not even associated with the other place. Example: you own 10 rental properties and put solar on 5 of them. You produce enough power to cover 70% of the power for all 10 properties. Power generation is power generation. Why does the utility copany have to make things so complicated as long as all the accounts are in the same name? Split metering will likely be cheaper than buying separate power inverters for 2-4 units along with all the paperwork, blue prints, and separate fees for each unit to satisfy the city and electrical contractor company.

Antwana Black · Answer

I decided to move in with my friend is a one-family house was in the process of getting into a two-family but we see our electric every time money never down he's always seems I don't use that much life I don't understand seemed like every month I'm doing $100 light still never go down