High Electricity and Gas Bills for Triplex

[Alex Ghameshi]

Hello,

I am in the process of purchasing a 1890 built triplex in Fitchburg, MA. The current setup by the owner is that he pays for electricity and heat for the tenants. There is one 3-bedroom (5 people) and two 1-bedroom (2 and 4 people) in the triplex. I assumed that worst-case I would expect a $700 total bill on average between all the tenants ($100 x 3 = $300 for electricity and $133 x 3 for gas) considering that the average for my own different 2-bedroom (1890) apartment is $60/ month for electricity and $100 for gas/month.

When I called the gas and electricity company, it turned out to be much more. $500 for electricity on average/ month and $600 for gas, with a total of around $1100, severely cutting into my cashflow. At this point, my thoughts are why is the electricity bill so high, considering heat is natural gas.

In terms of electricity, there are 4 panels, however, it seems like the owner hasn’t tried to figure out which panel belongs to which floor (per the realtor) even though the panels were clearly labelled 1st Floor, 2nd, and 3rd and general. So my plan is to get an electrician in and verify that each panel indeed belongs to each apartment and reduce the rent for each floor by $100 and tell them to take care of the electricity bill. Before doing this, I do plan on asking the local utility service to do an energy audit to make sure if there are indeed any air gaps/ insulation issues, they are resolved so that the tenants don’t feel like I am screwing with them (they are all TAW).

In terms of heat, there is a single oil boiler that has been converted to natural gas in early 2010. It’s a super old American Standard Oil Boiler (1960s) which seems to be functioning, but I have no idea how long it will keep on going. I have a feeling that this boiler is probably inefficient and replacing it might help with the heat bill. Hoping that the energy audit will help me determine if it’s worth switching to a new gas boiler right away or just waiting until the oil boiler bites the dust makes more sense financially. Splitting the heating into three boilers so that the tenants eventually take care of the heating bill will probably not be cost effective at this point.

I guess the point of this whole story is, is there something I am missing? Any suggestions? Lessons learnt from someone who has been through this? Do you agree that the heat/ electricity bills are high (around 3000sqft. of living area in total or it’s normal when tenants don’t care about the bills)?

Following are the specs of the boiler:

American Standard A-3 Oil Boiler No. A-36

Gross Output: 208 MBH

Installed Radiation: Steam Sq. ft: 650 ; Water: 180.9 MBh

Firing Rate per Hr. 2.00 GAL

Also, do you think I need an electrician to figure out the panel situation or can I just individually trip circuits manually in each panel and confirm using a multimeter what each circuit is providing power to (if it’s a power receptacle)? I would like to learn things as it’s my first rental investment but if I need a professional, I would like to do the right thing.

Thank you, I will appreciate any insights.