I believe that the contractor who released the property for usage is the one at fault. 

So my question is what is the best way to meter the usage between tenants?

Its great in the fact that renters love it but the water usage is literally 3 times the normal water usage compared to others in the city.

I pay $250/month for a 2-unit property, which is the same as what I pay at another 4-unit property I own (this includes, trash).My question is, can I deduct monies from his security deposit because of the lease violation or the excessive water usage caused by excessive people living in the unit?

I'm going to install water meters to gauge usage (to see if it's still worthwhile to keep these machines) but in the mean time I need to verify 'actual' income.

This means, we have the gross number of kWh the panels produce before any household usage, and also we know the net energy generated, the amount that we sell back to the grid.

I have seen something that you also have to watch out for when buying.Checking of the city and county is on old water and sewer systems.They could have deferred maintenance for decades and are looking to up average charges for usage rates by volume and gallons used.Some places I have seen go up by 40% in 5 years.The investors I talk to believe more than anything the rising utilities can eat away most of their future returns.Yes you can bill the tenants for the difference of overage used.Some will pay and others simply won't and you have to decide to evict them over a few dollars or eat it and keep from high costs of turning the unit again.It's a tough situation.Forget one house but imagine a large complex dealing with an issue like that.I see it a lot and is why the price has to be really good to compensate for it.

Then each person is charged by the room, usually by the month,, on month to month lease with shared upkeep of common areas with a set chore chart.Entire house can be shared equally by family or several roommates, all on same lease.I would set your occupancy limit, income, credit, criminal, ect criteria and put this in your ad. so people know it's a >>> 4 br house,, with occupancy of >>> of 6 people max.. you set the limit, it just can't exceed code, but you can set lower than code to keep the house from having to much utility usage and less wear and tear.And parking is always a issue with more people.. guests, are issue. 

Will your PM watch your water bill usages for your units?

Again, I'm not suggesting that the above structure is inappropriate in all circumstances.