All Forum Posts by: Jedd Braunwarth

@John Smith, do you know if the plumbing is already separated for each side of the duplex? Is it a side by side or top bottom duplex style? The largest cost is obviously the plumbing alterations and if you can avoid them. If you can, the easiest may be to switch the water utility to your name, submeter both sides of the property and each tenant pay their usage to you based on the two meters. I think even submetering one side will cause tenant complaints, arguments, non-payments, etc. This happens even more with RUBS. Full disclosure, I own a submetering company but have seen it all happen because of this!

@Garrett Penfield sounds like its a decent deal. Can you raise rents if you update it? Who pays utilities? Also, even though it would cash flow less, why not put less than 20% down since you are going to owner occupy? You could probably put 5-10% down and save the rest for the next investment or repairs or both!

I think it sounds good. To me the boots on the ground handyman is the most critical in the deal. I'm not as long distance as you but have out of state property. I self manage myself still but have an awesome handyman that does everything. I submeter all of my units too. Basically I am doing what you are looking at right now and it's gone very well. The management and submetering is easy. Find a good handyman and don't let them go! 

Done

@Tyler Esparza I really have nothing to add but felt compelled to respond as I was just down in TX for work a few months back and went to the New Braunfels German Fest. It was fun! Listened to a solid polka band. Haha

@Weina Shi I did end up submetering as RUBS just did not seem fair to me. It was fine and works for many people and is cost effective. I also added coin operated washer and dryer so didn't know if I should take out a percentage for that and not pass that on. Of course I could have still passed 100% onto the tenants as they are the ones using the washers and dryers but isn't recouping utility costs part of the reason we go coin operated? I am more biased as after switching from RUBS to submetering I ended up starting my own submetering company. However, my experience with RUBS is what made me go down this path.

@Weina Shi Yes, RUBS is the way to go if you want to avoid hardware costs. Funny, Sant, the other commenter so far, and I were just having this conversation in another thread. I used to implement RUBS in a 6 unit. Here was my experience:

 For the most part it worked well but the reason I was swayed away and looked into submetering was because it increased the number of calls/complaints I would get from my tenants. I would get calls and emails over the weekend from one tenant letting me know the other tenants had friends staying the weekend with them and they wanted me to know because they did not want to be assessed the additional water usage. It was basically a "point the finger at other tenants for high usage each and every month" To their benefit in many ways I agreed with them as I wouldn't want to pay for other people who weren't responsible for water usage. It didn't cost me anything but I got tired of the complaints. Clearly the ultimatum is RUBS is free to implement and only costs a monthly fee to pay a company to do it for you or your own labor to do it each month vs. pay for a larger up front cost to install meters (that is not always cheap) and a monthly monitoring cost.

@Account Closed Yes, the city will install meters in a multi-family. However, each city is going to have different codes you have to comply with. Some are very easy to work with and as long as you have individual water lines going to each apartment (which plumbing separation can be the most costly part) they will install meters. I have yet to hear of a municipality do it for free though. They all charge for the meter and the connection fee. Some will be very strict and if you make large plumbing alterations or even just cut into the pipe to put their meter they will require you to bring all plumbing up to code. One instance I have seen was an 80 unit complex had individual water lines all in one utility room. They contacted the city to install 80 meters. The city quoted them $5,500 per apartment unit to install meters and service connection fees. BUT, they also said that all plumbing had to be then brought up to code and the water main coming from the street did not meet fire code and that would have to be dug up and replaced in addition. We are now in there with a $60 meter which did not require any plumbing code violations. Honestly though, if you can or your locale is easy to work with having city meters is 100% the best option! I tell all of our clients that if they can go that route do that, if they can't then come to us.

I am obviously biased with submetering vs. RUBS but before I started the submetering company I started implementing RUBS in my own 6-plex. For the most part it worked well but the reason I was swayed away and looked into submetering was because it increased the number of calls/complaints I would get from my tenants. I would get calls and emails over the weekend from one tenant letting me know the other tenants had friends staying the weekend with them and they wanted me to know because they did not want to be assessed the additional water usage. It was basically a "point the finger at other tenants for high usage each and every month" To their benefit in many ways I agreed with them as I wouldn't want to pay for other people who weren't responsible for water usage. It didn't cost me anything but I got tired of the complaints. Clearly the ultimatum is RUBS is free to implement and only costs a monthly fee to pay a company to do it for you or your own labor to do it each month vs. pay for a larger up front cost to install meters (that is not always cheap) and a monthly monitoring cost. 

@Account Closed, full disclosure I own a submetering company but thought I would respond since I am so close to this every day and need to know what is out there with competition. You will really get a wide range of prices depending on what YOU want. Really there are manual reading (lowest cost), radio read systems that the owner will do similar to municipalities (generally highest cost as you have to buy the software and radio reading hardware) and finally automated reading where the submetering company reads the meter for you and generates the water bill. I am sure you already know this with your research. In my experience for main line meters (one per apartment) going with 3/4" is required. 1/2" is too small and will not provide enough flow and would only go that small if you are reading hot and cold individually or even per point of use. Pricing, many will sell a brass meter similar to what the city uses and these will run anywhere from $100-200 per meter. Plastic meters will be lower cost. Some submetering companies will offer meters for free but charge a higher monthly monitoring rate to recoup the cost or even lease the meters out. Obviously manual reading may be the lowest cost but each month requires man hours to read each. The advantange to that is that you get a walk through of every unit you own each month to make sure things are in order. Finally, generally advertising $10-20 less per month once you start submetering is the norm. The results are good by doing that as you get more interested candidates and the water bill is always much higher than $10-20 each month, so money in your pocket. The most amazing thing I have seen is how much the water usage drops per month overall when the tenants are responsible for the water. No more long showers and leaking toilets do not go unreported. Good luck!