Even if you do it per person what if the single person in the garage apartment likes to take a bath every night or even really long showers and washes their car every week and the family of four in the house takes quick showers in an effort to lower their water bill. 

I didn't wash my hands of it but instead took it upon myself to handle it.  

It's interesting to note that actuaries, whose job is to set insurance rates such that insurers can remain solvent even in the face of improbable but possible events, are also tasked with understanding and managing risk. 

Was he reluctant or all for it?

These are homes that need complete makeovers, (Wash Park, Bonnie Brae, Barnum, Aurora, Thornton, Broomfield, Villa Park, Sloan's Lake), it does not matter the area  As such, it's a wonderful time to be a seller in Denver! 

Once you hit early 30s, you have kids, thinking about schools and a bigger house, it's off to Stapleton, or the more adventurous ones get into Highlands or Wash Park and do a pop top or a scrape off (are there any bungalows even left to pop the top on in Wash Park?).

If investor #1 made a market rent payment, and that was distributed equally to all three investors, then its a wash.

Brian,PROS: Guaranteed on time rent; andRoutine inspections by Sec8 inspectors which keep your tenants on their toes.CONS:Overly demanding at times;Sense of entitlement;Endless of sobbing stories;Mostly on disabilities (regardless of most of them able to work);Will never care for your proerties;Tenants not paying the water bills in full each and every month (If they're to pay for water usage);Constant calls from sec8 tenants asking from you to write letters for them to sec8 office stating that no additional residents are living with them (this is in response to complaints sec8 office received); New pit bulls in house regardless of what it says on the lease;If you're paying for water and sewer, your property will look like a car wash and laundromat since most of their family and friends will be using your property because of ammenities.Cigarette butts all over the yard;Rent is below market rent;Arrogant Sec8 inspectors; etc.

If they have to pay it might discourage them from washing so much. 

I paid a lease and paid for my gas and car washes.