Determining whether to separate water/electric meters for 5 unit

[Jason Thomas]

Hi all,

I have a small 5 unit apt complex in NJ and want to know whether it makes financial sense to separate the water and electric meters. Is there a formula or easy way to determine whether the upfront Capex costs are worth it in the long run? I intend to hold onto this property for quite a while so I am leaning towards separating out the meters but wanted to get some advice or hear out reasons why that may not be a good idea. I'm guessing it may cost about 15K to get it all done.

[Michael Craig]

@Jason Thomas one alternative is to implement RUBS - Ratio utility billing system. Essentially this splits the utilities evenly throughout all your tenants. I am not familiar with NJ so you may want to see if you can do this in your area.

Another thing to point out is what are other units in your market doing for utilities. If water is included in competitors units, you may want to include water in your lease to stay competitive.