All Forum Posts by: David A.

 I think it’s called Ratio Utility Billing System. Basically you are using a formula based on sqft, number of occupants, number of fixtures, number of bedrooms, or a combination of these to calculate how to divide the utilities between the different tenants/apartments. It’s like when you had roommates in college and everyone divided the utilities and rent. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Hastings.

Triplex

@Cliff T. take a look at this link. If you go to chapter 2 it gives a great explanation for implementing RUBS for existing and/or new tenants. https://books.google.com/books?hl=en&lr=&id=I2QDlsjPOmYC&oi=fnd&pg=PR7&dq=encouraging+energy+conservation+and+efficiency+with+RUBS&ots=iwlsk_mwn9&sig=h97O8KN9c1BJ92BTHYbYbTo02GM#v=onepage&q=encouraging%20energy%20conservation%20and%20efficiency%20with%20RUBS&f=false

So after further research, I found this great publication from 1980 on Encouraging Energy Conservation in Multifamily Properties that talks very in depth about RUBS. If you read through it you get a lot of empirical information on RUBS. It also has a best practices area for implementing. 

@John Mocker - Thanks for the list. That is really helpful. I was hearing all kinds of different things from the different insurance brokers. 

@Stephen Gallagher - I see that you are out of the Northeast. I assume there are a lot of older houses with K&T wiring around there. Thank you for your knowable feedback. When I did the inspection of the property it looked like most of the K&T wiring what updated when the panel was updated to breakers. Do you know why and electrician or owner wouldn't just finish the rest of the house? I'm guessing it would be just $$$. Is there any technical reasons?

@Michael Norris - Thanks for the feedback. I have been doing some shopping around.  The brokers have been pretty close on their estimates. They were giving me different feedback on the items I listed originally. Particularly, 

1. the appearance of the house
2. The boiler
3. K&T wiring that is left. 

But each broker said it was a different thing that were causing the insurance to be so high. RCT around $3400 and ACV around $1700 per year.

Thanks again guys for the feedback. 

So I am about to be a proud new landlord and am wondering what others have done to lower their cost of insurance on older (1900 ish) multifamily rentals. This will not be a house hack just a good old fashioned investment property. Let me explain what I think is impacting the insurance rates. I would love to hear your thoughts on where the biggest bang for the buck on improvements would be to decrease the insurance rates. 

1. Old house - don't think I can really change this one.
2. Central Nebraska so wind and hail - I don't plan on moving the house though
3. Some out of date electrical - has breakers but some knob and tube
4. Some out of date plumbing - galvanized
5. Exterior does need a good paint job and some gutter and soffit repaired. 
6. Boiler/Steam Radiator heat - boiler is ~12 years old
7. Some floor joists have minor cracks - this should be easily fixable right?
8. Some windows are cracked and missing the glass

Can't wait to hear your thoughts...

Thanks @Daniel Helton what a fast reply. I really appreciate the explanation of RUBS as being considered as additional rent. I'll chat with a local lawyer and see what they think. 

@Michael G. & @Daniel Helton I am about to take on a new to me older multifamily property (4 plex). I am curious how you handle the utility bill back process with RUBS. I am an engineer so the math for calculating what is due based on sqft and occupancy isn't a challenge. However, I can't quite figure out how to do the bill back.

I assume, I get the utility bill on lets say the 5th. Then I do the math and send the bill to the tenants on the 6th. From there do you treat the utility bill like rent? Due on the ___ of every month with a grace period and then start charging late fees? I know this is getting into some state specifics (I'm in Nebraska) but It would be good to know what is done by you folks so I know how to talk it over with the attorney. Thoughts?

Thanks @Tom Lipps. I came to the same conclusion as well after talking to a few other investment friends. Running the numbers really brought it all into perspective. 

Hey @Tom Lipps, I am just now getting into a multifamily property and faced with the same dilemma. It seems like this would be a common question. Curious what you and your agent concluded. I too am getting an umbrella policy. My properties are older (1900s) and the rates are much higher than newer buildings. So, the difference between replacement and cash value for ROI is huge. Would love to hear what you went with.