Separating Common Water

[Watson Hilaire]

Hey BP,

I keep passing on multi properties that have common water because I don't want to pay for any utilities. Now I am wondering if these are missed opportunities. Can anyone tell me ways to separate common water and what costs are involved?

Thanks,

Watson

[Taylor L.]

Yes, it could be an opportunity. The common way is RUBS, Ratio Utility Billing System. May or may not be legal or generally work in your market. Billing back water doesn't work everywhere, but it can be a huge NOI impact.

[Scott Weaner]

I have 4 duplexes that are like this. I divide the water bill per capita and bill the tenant myself. It is annoying but not a deal breaker. I have not had any pushback.

[Nathan Gesner]

Take the average cost of water, divide that by the number of units, increase the rent by that amount. The only potential problem is that tenants may over-use the water and cause the bill to go up or they could ignore a toilet that constantly runs or some other issue that jacks up the bill. You just have to monitor it each month and keep an eye on things but it's very little effort.

[Beth Matherne]

@Watson Hilaire

You can buy things online that will hook up to the water in the apartments and you can read them yourself then bill. You can divide the water bill per tenant. You can pay to have meters installed from the water department. You can raise the rent to be sure you are covering the cost. So many ways to cover paying the water.

We also state things in our lease like, No washing the car, no pools, things of that nature.

[Watson Hilaire]

Thanks everyone for the info!

[Dennis M.]

@Watson Hilaire

The problem with jacking up the rent is that you price yourself out against the competitors in the area

[Manmath D.]

I’m having this problem right now. I just bought a duplex. Live in one unit and rent out other unit. Previous landlord payed for water/sewer/garbage. I took over just like that. My monthly WSG bill is $250. I get a text from my tenant saying they just bought above ground pool and she will pay for extra water bill for the month. I really don’t like this. I’ve been thinking about this situation for some time now and thinking of options going forward. $250 is a huge bill for me to cover and have to split this with tenant. Since it’s going to be more than $100 jump for them per month, how do I smoothly get it done without causing any concern for us. 🤔

[Watson Hilaire]

@Manmath D. I wouldn't allow tenant to install above or below ground pool. Not only will this destroy your lawn but it will open you up to liability. You will need to make sure you let your Landlord/homeowner insurance aware so it gets covered. If the tenants are on month to month I would inform them in two months I am installing meters (via RUBS) to have them pay for all utilities. This should give them plenty of time to adjust their budget for the added expense or seek other housing. If they leave great because new tenants will not have a problem with paying utilities since it is from the start. 

[Johann Jells]

Originally posted by @Dennis M.:

@Watson Hilaire

The problem with jacking up the rent is that you price yourself out against the competitors in the area

 Not if you make clear that water is included.  Around here rentals runs the whole gamut from nothing included to everything, even electric. I have a 4U property where I pay the heat as well as the water/sewer and the hot water. I realized that my cost wasn't the bills, it was the difference between what I built into the rent and what I paid.