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Updated about 4 years ago,

User Stats

3
Posts
1
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Eric Donaldson
Pro Member
  • Investor
  • Upper Valley, VT
1
Votes |
3
Posts

Splitting water and sewer in a duplex - worth it?

Eric Donaldson
Pro Member
  • Investor
  • Upper Valley, VT
Posted

We have a slow water leak near the foundation and have decided to run a new line to the duplex from the town valve ~30 feet away. Above and beyond the expected repair cost, we are exploring using this as an opportunity to split the water ($) and sewer ($$$) to the units. We think it will be $5k in connection fees from the town and a few thousand in additional labor. 

We are in the process of normalizing the building and we aren't counting on the cash flow right now, but for reference, the additional costs to separate the sewer and water would likely wipe out 75% of this year's cash flow. We wouldn't plan on current tenants pay the additional utilities until their leases are up in 3 and 6 months respectively.

If this were a larger building where people cared more about cap rates, I can see this as a prudent investment in forcing some appreciation in the building to a potential buyer (maybe less so to an appraiser if we refi at some point). We are planning on holding this one for the foreseeable future. 

Now my question: Am I being short-sited if I don't split the water due to the upfront cost, or should we skip it and focus on marketing the units by clearly communicating those utilities are included?

P.S. Looked for similar topics in the forums and couldn't find anything useful. If I missed the splitting utilities mega-thread, I'd super appreciate being pointed in the right direction!

Thanks all!


  • Eric Donaldson
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