(and of course it will have been used before it overflows)  My exposure to investment property is through REIT's only because I live in one of the outer boroughs of NYC and I see no point in spending a ridiculously high amount of money for a building that's going  to produce a ridiculously low cash flow (that's IF everyone paid and IF nothing broke- big IF's)  add to that gross over regulation along with moronic laws that give all the power to the tenant  and I can't see a reason for me, if I want to be able to sleep at night and have peace of mind, to own physical property. 

Just raise the rents by the max bill over the past two years (divided by number of units), plus 10%.

I'm planning to ask the owner for his utilities bills. 5) I’m not sure how to increase the rents to afford the repairs as time goes on.

I would have it at the marina so amenities could be used with shore power.

Because of this most duplexes have one water meter and the owner pays the bill, approximately $600-$800 for the year total (both units combined).

Best to do your homework and really learn all of the neighborhoods, build a power team, or partner up with an investor that knows the market and has a team in place.As for how I'm handling the high taxes...

Determine the difference in the Tenant's utility bill.

Does he have someone with power of attorney who is looking after things? 

As an investor who pays my bills by selling income properties to rental property buyers, I can tell you that I, and my peers in this business, don't sell good properties at a discount.

We also manage properties for clients, and those who go cheap on rehabs around here ending up getting hosed in the long run because they have emergency repair bills constantly, they have higher vacancy, they get less rent along the way, and then they wonder why their numbers don't work as well as they planned.