CLEVELAND RENTAL INVESTMENT PROPERTY QUESTION-WATER SEWAGE

[Kyle Lofland]

I have just purchased an investment property in Cleveland and just transferred Water/Sewage into my LLC name...

Asking the water company what the average monthly usage is, i'm in sticker shock! Obviously past and current tenants have no consideration to conserve water...

Question.... is there a way to meter usage by unit so that tenant can be responsible for payment for future tenants? Water Company only has one meter at the property..

Any ideas how to pass this on to future tenants?

[Michael Gansberg]

@Kyle Lofland - I agree completely with @James Wise. But take the case where you could charge tenants for their use(even though you can't) - in that case, they would just demand that rent declined by a similar amount to their new water bill. Maybe it would induce some conservation on their part, causing a net benefit to everyone- but that's a big maybe.

Why don't you just cut your usage by 30% to 40% and save money that way? It'll be pure profit, and your tenants will never know the difference. 

Here's how: buy and install water-efficient toilets. The best one I've found is the Niagara Stealth at Home Depot for about $140 or $150(bad bowl vs good bowl- the good bowl is another $10.) If they ship it to you, it's more money, so pick it up or have your maintenance person do so. It uses 0.8 gallons per flush, whereas a standard toilet uses 1.6 gpf(and a regular high efficiency toilet uses about 1.28 gpf.)

Then install water efficient showerheads. I recommend finding a 1.75 gpm version on Amazon, check the reviews to make sure it's a good one(don't go down to 1.5 gpm, it's too stingy.) A 1.75 gpm saves about 20% over a conventional showerhead.

For faucets, use anything with the Watersense label(which makes it 30% more efficient than a regular faucet.) Aerators work well also(that's the super-cheap way to turn an inefficient faucet into an efficient one.)

Take all these steps, and your water bill should decline by somewhere between 30% and 40%. As a side benefit, whoever pays for water heating will also save money there as less water will need to be heated.

Hey, while you're at it- make sure you have LEDs instead of incandescent or compact fluorescent bulbs in the common areas. Stick to 2700 K or 3000 K color temperature and you should be fine.

It's been my experience that return on investment in water efficiency typically exceeds initial ROI on a good piece of real estate.

Hope that helped, 

Michael