Property Managment Issues and Billing

[Beary Bowles]

To all investors and property managers:

I own a 12 unit apartment building in a working class, C area, blue collar neighborhood.  Been managing the property and its tenants for 8months.  So the back story is I inherited some old tenants and added some with new tenants during management.  The building is a C type in a C neighborhood or little at low B.  1 Building, 1 water meter for building, no gas lines, electric heaters, electric water heaters.  

My issue is that the previous leases have agreements that included: Tents pay 15% of the water bill quarterly (1 building and 1 water meter) and the electric isn't in their name. Which means I charge them back after I paid the bill. 

One of my issues is that the tenants occasionally don't pay the water bill or electric bill on time, or even need a month to get back on track.  With more occupants the quarterly water bill has increased to the point that most tenants can't pay.  Now the water company has changed to quarterly to monthly bill cycles (ugh Lol).

So my idea to lower my expenses would be: Install separate water meters to units or sub meter the waterline to reduce the water bill? Inform tenants to change electric into their names? Add late fees to the utilities

Any suggestions would be greatly appreciated to help fix or improve the overall performance of the building.

[Nathan Gesner]

Something I didn't see mentioned is that all payments should be applied in priority. If tenant owes $600 rent and $60 in utility, a $600 payment would be applied to the utility first, then the rent. That means they would be $60 short on rent and subject to late fees and eviction. You've got to toughen up and let them know that all bills need to be paid on time or they're on the street.

In the future, I recommend bumping monthly rent rates up high enough to cover the water use. If rent is $600 and water use is $30 a month, charge them $630 and call it a day. That's easier on everyone.