Sub metering multi family in Meridian Idaho

[Andrew Eichelberger]

Hey there! Question for any of my Boise area or Southern Idaho investors. On the property in question (4plex); I as the property owner am paying sewer, water, and trash, has anyone had success in getting there units “sub-metered”? The property is located in Meridian. This is my first property and I would like to get this nailed down ASAP. If it is not possible I was thinking of doing a “cost share” billing plan, basically dividing the total bill for SWT by 4 units. Has anyone been doing this? I hope as a newbie I didn’t ask the most ridiculous questions to an easy answer :) thanks ladies and gentlemen for your responses.

[Jen Harwood]

Hey @Andrew Eichelberger, we pay WSG as a pretty standard matter of course on our Boise rentals, without passing that on to our tenants. However, if you wanted your tenants to pay those utilities as well, I think you have an easier option without going to the trouble and cost of sub metering. 

First, I would definitely not recommend doing a billing plan where you receive the bill and then retroactively charge your tenants for it (this is something you'll face with sub metering as well). Water and garbage bills are every two months, sewer is every three months. You can imagine how quickly this will become complicated - you'll have collection issues, possibly issues with timing reconciliations, etc. Not to mention your tenants wondering why the water bill is SO MUCH HIGHER in the summer than it was in the winter (they may understandably wonder if they are subsidizing their neighbor's extravagant water usage - and you know who they are going to be asking about that). 

Instead, I would recommend that you charge a flat monthly rate to each tenant to cover your average utility cost. It would be a separate charge above and beyond rent. I don't know about Meridian, but in Boise the sewer charge is a flat quarterly charge, regardless of usage, so that is easy to budget for. Garbage too is relatively flat. It may just take you some time to figure out what the right amount is, but if you just bought this property you probably already know the historical utility expenses.

The downsides are obvious - if your water bill is higher than the rate you are charging, you as the owner are going to eat that charge. But, as I mentioned, it's pretty standard in Boise for landlords to cover those charges anyway. Also, if you have tenants in place, you'll have to wait until your leases roll over to implement this charge; however, I would think you'd have to do the same if you sub-metered and wanted them to start paying for their own water. Maybe you don't have tenants yet so that is a moot point.

My approach in rentals and business is always to just go as simple as possible. Good luck!