Water sub metering in Massachusetts

[James Denon]

Hello Fellow investors

I am going through getting the 3 family rehabbed in Springfield MA. The goal is to have it as a long term buy and hold cash flow property. It is in a class C neighborhood.

There is major plumbing work that needs to get done. I am replacing all supply lines with pex. I will be running separate lines to each unit. So I have the opportunity to add sub-meters for each unit for the cost of the meter itself.  I would like to offset the cost of water to the tenants. Currently, I do not have plans to offer them washer/dryer/dishwasher hookups. If I sub meter the water, I can offer that option. That might attract better tenants. I also heard of horror stories of thousands of dollars of water bills because tenants are retaliating and they flood the house.

I know the rules: You need to have licensed plumber sign off that low consumption faucets, showers and toilets have been installed. This is not an issue for me.

My property manager is very concerned about sub metering. He is saying nobody does sub metering except the new constructions and if a town inspector comes in and has to sign off on it they will require that we have fire sprinklers to be installed since it is a 3 family. He is also saying that there are a lot of rules and regulations around it that I don't know of and it will cost lot more than I think. The only thing he has to do in my mind is read the meter every 3 months and bill the tenants. I don't think it should be that difficult.

My question to the community is: Does anyone have experience with sub metering water for an old triple-decker in Massachusetts? What are the pitfalls? What are the hidden costs? Would you recommend it knowing that I could get it done easily since I am redoing all the plumbing.

Thanks

[Filipe Pereira]

Originally posted by @James Denon:

Hello Fellow investors

I am going through getting the 3 family rehabbed in Springfield MA. The goal is to have it as a long term buy and hold cash flow property. It is in a class C neighborhood.

There is major plumbing work that needs to get done. I am replacing all supply lines with pex. I will be running separate lines to each unit. So I have the opportunity to add sub-meters for each unit for the cost of the meter itself.  I would like to offset the cost of water to the tenants. Currently, I do not have plans to offer them washer/dryer/dishwasher hookups. If I sub meter the water, I can offer that option. That might attract better tenants. I also heard of horror stories of thousands of dollars of water bills because tenants are retaliating and they flood the house.

I know the rules: You need to have licensed plumber sign off that low consumption faucets, showers and toilets have been installed. This is not an issue for me.

My property manager is very concerned about sub metering. He is saying nobody does sub metering except the new constructions and if a town inspector comes in and has to sign off on it they will require that we have fire sprinklers to be installed since it is a 3 family. He is also saying that there are a lot of rules and regulations around it that I don't know of and it will cost lot more than I think. The only thing he has to do in my mind is read the meter every 3 months and bill the tenants. I don't think it should be that difficult.

My question to the community is: Does anyone have experience with sub metering water for an old triple-decker in Massachusetts? What are the pitfalls? What are the hidden costs? Would you recommend it knowing that I could get it done easily since I am redoing all the plumbing.

Thanks

I am not an attorney, but if you do some poking around online it appears that beginning in 1990 buildings in Massachusetts with 4 units or more that are undergoing significant renovations are required to have sprinkler systems installed. I couldn't find anything on buildings with 3 or less units. 

That being said, you mentioned this is a class C neighborhood. What are your plans for getting the tenants to pay a $3-400 water bill every quarter? Class Cs can be hard enough to pay a consistent bill, let alone one that they don't "plan" for, even though they know it is coming. 

You could potentially be shooting yourself in the foot here. You will likely have to decrease the rent (to accommodate the fact that you are now billing them for water) while increasing the odds that the water bill doesn't get paid by them, which means you would have to pay it (so now you are out of $ twice). 

I dunno James. You might want to reconsider this one given the area.