Sub-metering a small residential building

[Chris V.]

Hi All,

Hope this is the right place to ask; I am in the process of buying some additional property and one of the new properties is a Triplex that does not have individual meters for Gas/Electric/Water for each unit. The previous (I guess technically current:)) owner was charging a flat fee but it was ridiculously low compared with the real usage. 

All my other units pay there own utilities and I really like that setup. So I am thinking of sub-metering the units as that will be a great opportunity to lower my expenses which is easier than raising the rent and I was hoping anyone had some experience with sub-metering a small building like a triplex. 

Like how does that even work, who bills the tenants etc. I googled around a bit and found some companies that offer services, but it sounds like they are geared towards bigger apartment complexes. 

I would even pay PG&E and the city to come and actually re-meter the units (so i dont have to sub-meter) but I checked their websites and it does not sound like they even do that. Which is strange because you'd think that they would like to increase their number of customers...:)

Anyway, very curious to hear other's experiences with Sub metering small residential! (bonus if this experience was in California:)

Thanks!

Chris

[Account Closed]

It's not hard to submeter at all. First check your local laws, some places dictate exactly how and if you can submeter. The meters for electricity, gas, and water all cost well under $100 each. They each need to be installed inline with the main supply line to each unit. If your units are not separated out so the plumbing, electrical, and heat has one loop per tenant, then it may be much harder to add submeters, although still likely cost effective. If you have central boiler or chiller systems these can also be submetered with BTU meters.

You, or somebody you pay, would have to read the meters monthly, and then send bills out accordingly. 

Most likely, if these are legal units, with separate legal addresses (unit A, B, etc) then you can have the utility provider install a dedicated meter for each unit and have them do the billing directly. Call them, do not rely on the website. This option may be more expensive for installation costs. 

I always prefer to submeter when it is possible, but you do take on additional risk that if your tenant doesn't pay for the utilities, you still have to. If you can write your lease such that any payments received are put first towards utilities and then rent, that way if they don't pay a utility bill you can evict for unpaid rent. You can also charge a utility deposit to tenants.