How best to split out Water and Gas to Invoice Tenants

[Caleb Gray]

Hello all!

I'm looking for my first property (live-in duplex, triplex, or fourplex) and after running the numbers, I found one that cash-flowed pretty well for a reasonable price at conservative estimates (plus my wife loves the house). However, after discussing more with the realtor it was disclosed that the landlord was responsible for water and gas, which very much destroyed the cash flow I thought I had. The property is a triplex, converted out of an old house that's been taken care of very well (as far as I can see without a building inspector), so the water and gas are not split out into separate meters for the tenants (electrical is).

In order to make this deal work, I'd love to figure out a way to invoice the tenants for those utilities. I've thought about splitting the water bill out proportionately to the number of tenants and then the gas bill by square footage of the units. That seems to be the most fair for the water, but since I think the gas is used not only for heat but also for stoves/ovens, I'm curious to see if anyone has another way of splitting this out.

Any thoughts?

Thanks!

Caleb