Multifamily Utilities - What do you use?

Question

Was curious what most locals here in Cincinnati utilize with multi-families? In my limited experience, as a renter and investigating some potential properties, it seems most owners are covering H20. What are you using in your multi? Or what do you typically see? Anyone utilize a RUBS system?

Have a great holiday season!

Craig H. · Answer

@Todd Kalsey Thankfully so far I have not.  I installed exterior hose bibs that need a key to turn on.  So tenants are not washing their cars etc, because I am the only one that has the key to them.  I renovated mostly everything when I purchased, so I installed water saving shower heads and toilets.  Not sure how much water they actually save because I don't have anything to compare it too, but I guess any savings is better than none.  These are a couple small steps you can take to cut down on water.  Obviously the ideal situation would taking the water out of your name, but depending on how the building was plumbed the cost of installing main shutoffs on each apartment may be too substantial for it to work out.  One thing I definitely recommend is installing shutoffs on all showers and sinks in the units.  So if there is an issue with a sink or shower in one unit you can just shut that water off and not have to shut the whole building down if that makes sense.

Stasiu Geleszinski · Answer

Todd,

The way I have seen it done is that there is a flat $30 utility fee for the first resident.  For every resident thereafter an additional $10 is charged.  So if you have a 2 bedroom with 2 couples living there the additional charge would be $70/month for water/utilities.

The goal is to really offset the water charge, not turn it into a profit center, because you run the risk of pricing out your tenants.

Todd Kalsey · Answer

@Melissa Nevich thanks for letting me know what you discovered.  I've had the same feedback locally regarding RUBs.  You're mention is the first I've heard.  Most of the areas that we're looking to purchase, water is included.  I'm with you on trying to change the climate.  I'll make some calls and see what I find.

@Stasiu Geleszinski appreciate your insight.  Could you expand on what you mean by "entry" fee?  So are they charging a flat, up front fee at lease signing, or something like that?  I'm somewhat "fuzzy" on this.  Thanks!

Stasiu Geleszinski · Answer

Todd, I am a broker specializing in the sale of multi-family investment properties.  I see a wide range of how my clients handle water.  Depending on the age/construction of the property there are a number of solutions you can consider.  There are some vendors that I could recommend to implement a sub-metering system.  I have also seen some owners and management companies that have an "entry" fee for water charges, and then increase the water bill back fee per the number of occupants.

First, I would look to see what your competitors are doing, and how they are implementing water and utility bill backs. Then use that information to craft your own plan for implementation.  Hope this is helpful. Please let me know if I can be of further assistance.

Melissa N. · Answer

Hey Todd,

How's it going!? You can call around and see if anyone is charging RUBs in your area.  Just call as a renter and see what is included in the rent. I know near my building, I've only found one other building that is currently charging a RUB ($25 for water/sewer).

I also called a property manager that has a few buildings in my area and they had never heard of RUBs but loved the idea. My hope is to keep in contact with them to help change the climate in the area. Networking is important even after you buy!

I'm also looking at the average income of the renter in the area so I know what they can afford. I think that has to play a role. Our plan is to submeter down the line since we have individual water heaters and then the tenant gets an actual bill so we don't have to worry about confusion over "am I paying my fair share".

Still sorting this out myself so I'd love to hear more from others.

Craig H. · Answer

@Todd Kalsey referring to an access panel.  Best of luck in your search for a property.  If you have any other questions feel free to reach out anytime!

Todd Kalsey · Answer

@Craig James awesome info!  I've never heard of the hose bibs.  No idea they made such a product.In terms of the shutoffs on showers and sinks, do you mean in terms of like an access panel in the bathrooms?  Or are you referring to a shutoff at the line running to the actual unit?  Just wanted to clarify.

Todd Kalsey · Answer

@Craig James thanks for the feedback.  Have you been burned on any exorbitant bills at on time or another?  (Everyone washing cars in the summer?  Long showers? etc.)  If so, any way to combat that?

I guess that's my biggest fear, if I can't bill back somehow.

Also, did you investigate cost on putting shutoffs on each apartment?  Possible?  Cost?  Just curious.

Thanks again!

Craig H. · Answer

I cover the water in my 5 unit building.  8 people live in the building.  There is coin operated washer as well.  The average bill for 90 days is $557, so $186 per month for water.  I looked into sub-metering during the due diligence process when I was purchasing the 5 unit, but it was not possible because each apartment did not have their own shutoff.  There is only one main shutoff for the building.

Multifamily Utilities - What do you use?

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