A community garden could be a good idea but you'd have to have access to water there and it would cost you money on the usage of water.

This is not necessarily a deal-killer (in fact, it can be a great negotiating point), but you need to go in with eyes wide open and know the zoning, the likelihood of the City getting involved (and the likely outcome if they do), and your lender's position on the zoning/usage and income.  

I wouldn't do it, regardless of legality, unless I had some specific device that metered and accounted for the actual usage of the tenant.

This would make more sense if you were covering all the cost because they would complain that you limited their usage and you were only covering 100.

With no usage, the cost would still be near $120. 

Hello All, Just purchased an 18 unit multi family.The water billing for the town charges a flat sewer fee ( x18 - $422) and flat water fee (x18 - $254) plus they meter the water usage as well. ($180In my mind Since there is only one meter, I believe i should be charged 1 flat sewer fee and 1 flat water fee and of course the amount for all the metered water we use.Has anyone gone through this with a city? 

Also installing 2 more hydro meters to allow me to charge for hydro usage. 

Does anyone have any best practices to equitably charge tenants for water usage?

So basically it would result in the same tax plus the cost of doing an inappropriate 1031.Have LLC A do the 1031 and keep enough boot to pay the taxes and buy out the member's interest.  

Working on a deal currently hoping to use them in the future, but getting that confirmation of usage from you makes me feel a lot more comfortable about choosing them and gives validation to their creditability as a lender.