Otherwise you can take the average water bill and include that amount on top of your anticipated rent and advertise that water is included in the rent up to that predetermined amount.Thanks Daniel - I had to look up recoupment structures and billing methodologies (RUBS) system, but that looks like a good option too.

An engineering-based study is the IRS' preferred methodology and not something CPAs do themselves.

Typical Valuation Methodology for Commercial Real Estate:  Market Rents minus Operation Expenses = Net Operation Income (NOI).  

The whole process is based on rigid methodology of credit scores, past rent history on and on.

Realtors use the most common methodology to assess value for a property that appraisers use.

How about vacancy factor in Riverside.Seeing both Houston and Riverside have historically appreciated faster than inflation, you methodology would likely still work if they can handle a short term of negative cash flow. 

One tenant is a family of 5 in a 4 bed and one tenant is a single person in a 2 bed.Appreciate any methodology that has worked for anyone with a similar situation?

Your best argument may be that "market rate" is too indefinite to be enforceable as there is (apparently) no methodology provided for in the contract for determining "market rate."

Renovations by owner-occupants of single-family residences.So I understand those above two points to mean that I don't need to involve any further professionals and I can proceed to carefully take care of this on my own (I'm in the process of educating myself on proper abatement methodology).Anything else I should know?

Make sure it is an engineering-based study which is the IRS' preferred methodology.