Water Submetering in Los Angeles with ADU

[Rick Albert]

Hello Everyone!

Right now between my house and ADU, we split the water based on the square footage. When looking back, that isn't an accurate way to do it for a variety of reasons, plus it is a hassle every time to do the math and collect. Therefore right now I'm considering using a service for submetering and then billing separately (currently I live in the ADU and rent out the main house).

Does anyone have experience with this?  Anyone have any tips?

I looked into True Submeter but they don't service California and I am waiting to hear back from California Sub Meter.

Thanks in advanced!

[Liam B.]

I just included all in with the rental. Electricity, water, and gas. The contract stated that it is to be used a reasonable amount. For example if the bill is 10x the norm then I have the right to cancel the contract. Too much of a hassle for me to calculate the elec, gas, and water. It is such a min cost anyways. Just include it in the rent. 

[Rick Albert]

Our electricity is already separate and we designed our ADU to be all electric so no gas. Normally I would agree but if we are renting out the main house I don't want them paying for the ADU. One option is to give the front house a credit for water based on averages, but I don't know if I would agree to that as a tenant. Water in Los Angeles is expensive and the rates go up if there is an ADU.

[Dan H.]

Originally posted by @Rick Albert:

Hello Everyone!

Right now between my house and ADU, we split the water based on the square footage. When looking back, that isn't an accurate way to do it for a variety of reasons, plus it is a hassle every time to do the math and collect. Therefore right now I'm considering using a service for submetering and then billing separately (currently I live in the ADU and rent out the main house).

Does anyone have experience with this?  Anyone have any tips?

I looked into True Submeter but they don't service California and I am waiting to hear back from California Sub Meter.

Thanks in advanced!

 What your currently doing is similar to what we do on a majority of our units.  We find it easy.  We have a spreadsheet that calculates each tenant’s cost and text it to them.  Maybe a couple per unit.  

Water in San Diego is real expensive.  A couple items

1. If you do not charge the tenants for water, they have no incentive to conserve it.  
   
   Tenants under value the cost of water.  Including the full cost of water in the rent will make the unit harder to rent.  If a unit is $1500 without water and another unit is $1650 because it includes water that Averages $150/month with tenants that are not conserving because the LL pays the water, the $1500 unit will get many more people to look at it when trying to fill the vacancy. 
   

I find little reason to pay for a service when it takes so little time for us to simply split the water bill as agreed when the tenant signed the lease.  

Good luck

[Rick Albert]

Thanks for the insight! That was our concern with including it. We have been doing it based on square feet, but the ADU consumes way less water than what that would actually calculate to (the main house has a backyard, more people, etc).

[Chad New]

Rick, I am preparing to convert a detached garage in Anaheim into 2 bedroom ADU. I have the second address and spot meter report completed and having plans drawn up. My next hurdle to tackle is gas/water. I believe I am going to make the unit all electric preventing the need to meter out the gas. I am curious if you have heard back from California Sub Meter yet regarding the water.

[Rick Albert]

Hey Chad,

I made my unit all electric, which definitely saved some time.  So far all the sub metering companies have a minimum 20 units.

I’m going to talk to a plumber to see what my options are.

[Ronnie S.]

@Rick Albert I may get a lot of push back from the team but I split my utilities on my ADU the conventional way....each dwelling has its own meter for water, electric and gas.

I did not want to incur the cost but I figured...that maybe....just maybe....sometime in the near future us ADU home owners may be able to rent both units....like a duplex.

At that point it will be worth it to let the tenets be responsible for their own bills.

Not saying that other ways are bad...they are actually very cost effective if you are living there...but what about as you scale your business and move onto other properties.

This of course if your city will allow you to rent both units...the city I am in is tough but things can change as more pressure is being put on affordable housing.

Once again...not saying any way is right or wrong...I just did it this way for the reason I just mentioned.

Thank you....

[Rick Albert]

Hey @Ronnie S.,

We wanted to split the water meter, but we didn't have the time nor the money to do it. I'm in the same boat as you. We actually live in our ADU while we rent out the main house and the intention is to rent out both. My goal is to make this go as easy as possible with little to no management on my part.

Best,

Rick

[Anthony Morrow]

Hey guys I thought I would jump in after reading this thread. I have an offer in on a property setup exactly the same with big house in front and a little additional unit. I am very interested from hearing from you guys that have experienced this situation. Oh and someone mentioned that you should make sure you are allowed to rent both units out. I didn't even think to check my local govt on the regulations about rental property. I want to know the best practices for splitting utilities. Thanks in advance

[Liam B.]

Seems like you have to get creative with the lease contract in terms of the water. Something that is average of 12 month for that front house. Possibly as an incentive you cover anything over a certain amount to give peace of mind to the renters. The big thing is reasonable, you don't want them to just live the shower on 24/7 or a dispute happens with one of the renters and they purposely find a way to mess with you.

[Rick Albert]

It really just depends when it comes to utilities. Right now we have it split based on the square footage of our residences. The problem with that is it is just me and my wife in the ADU and four people living in the main house with a large backyard. Therefore we are paying for more than we should. Although I'm not sure if a tenant would care, but I also do want to be fair. If I was living in the main house I would probably just include it because it is so minor. The average for the small unit is probably in the range of like $25-$50/month. My front tenants are behind in getting me the bill so hopefully I should know shortly. We decided to make the unit all electric so we didn't have to worry about the gas bill and the meter is already split for electricity.

[Matthew Forrest]

@Rick Albert I currently split water based on the number of people. Not as good as a separate metering, but its less cost and seems fair to me with little added effort for billing.

[Rick Albert]

I think that would work if the two units were the same size. Otherwise in our example we would be paying more (we live in the 350 square foot ADU). Especially because we consume much less since our backyard is drought tolerant versus their large grassy backyard.

[Gary Aragon]

Quote from @Rick Albert:

Our electricity is already separate and we designed our ADU to be all electric so no gas. Normally I would agree but if we are renting out the main house I don't want them paying for the ADU. One option is to give the front house a credit for water based on averages, but I don't know if I would agree to that as a tenant. Water in Los Angeles is expensive and the rates go up if there is an ADU.

Actually, the water rate goes down when you have an ADU if you have DWP. You get a multi-unit discount. I'm in the process of having the Field Investigation done to determine my discount. I can post the percent discount after it goes through.

[Gary Aragon]

Quote from @Ronnie S.:

@Rick Albert I may get a lot of push back from the team but I split my utilities on my ADU the conventional way....each dwelling has its own meter for water, electric and gas.

I did not want to incur the cost but I figured...that maybe....just maybe....sometime in the near future us ADU home owners may be able to rent both units....like a duplex.

At that point it will be worth it to let the tenets be responsible for their own bills.

Not saying that other ways are bad...they are actually very cost effective if you are living there...but what about as you scale your business and move onto other properties.

This of course if your city will allow you to rent both units...the city I am in is tough but things can change as more pressure is being put on affordable housing.

Once again...not saying any way is right or wrong...I just did it this way for the reason I just mentioned.

Thank you....

I live in Los Angeles. I added a 2+2 garage conversion. I rent out the main dwelling and am in the process of getting the utilities together before I rent out the ADU. The electric and gas are on separate meters, but I was told by DWP that I could not separate out the water unless my lot was R3. Mine is R1, so I need to figure something out. I don't want to pay the water bc with DWP sewer surcharge and solid waste surcharge are included in the bill. So, I'm looking to install a submeter for the water. It looks pretty cheap if you're able to read it and bill it yourself every month. There are so many submeters on the market. I'd like to get a referral on a model from someone who has installed one that they are happy with.

[Rick Albert]

Quote from @Gary Aragon:

Quote from @Rick Albert:

Our electricity is already separate and we designed our ADU to be all electric so no gas. Normally I would agree but if we are renting out the main house I don't want them paying for the ADU. One option is to give the front house a credit for water based on averages, but I don't know if I would agree to that as a tenant. Water in Los Angeles is expensive and the rates go up if there is an ADU.

Actually, the water rate goes down when you have an ADU if you have DWP. You get a multi-unit discount. I'm in the process of having the Field Investigation done to determine my discount. I can post the percent discount after it goes through.

 Please do because in Los Angeles our rate went UP because of the multifamily. 

[Tim Ryan]

Might be tough with one unit.  I had a 104 unit complex and landlord was paying all the water. Once we purchased I found a company called Water Systems (somewhere in the South). They provided the meters that go on every water meter in each unit. We had a laptop with bluetooth connection so they get the readings. The company does all the billing.  It brought in $3500 per month!

For you, there are these same small meters on Amazon and work with wifi.  You could buy the meter, have a plumber install, you connect to computer, charge the exact amount of water usage.  At the water heater the cold line in will calculate all usage.