Anyone have any experience with rental duplexes where there's only one meter for everything? - Posted by Vic

Posted by The Donald on July 03, 2000 at 18:03:18:

Actually, in Ontario - you’d be surprised. Especially if your lawyer does the request for any outstanding work order with the fire dept, and then requests a fresh inspection, they’ll usually comply (provided the $40 fee is included with the request).

After all, no fire dept wants to be responsible for the next disaster in their town because they chose not to ensure a property was up to fire code.

Have no idea about your neck of the woods in the US - but in Canada - Ontario at least, it’s not a problem.

Anyone have any experience with rental duplexes where there’s only one meter for everything? - Posted by Vic

Posted by Vic on July 01, 2000 at 05:26:13:

I’m in the process of buying a duplex that has only one electric meter, one water meter, & one gas meter.

The cost to seperate those meters is exorbitant - water meter alone is over $1500 plus. Electric & gas meters would also be prohibitive.

Considering that this is a very old duplex (about 100 yrs. old), everything would have to be redone in order to seperate the meters. Further, this double is in a bad area, where the primary occupation is collecting welfare, so I really don’t want to put much money into it if I can help it.

I’m buying it to keep. Paying $27,500 & rents should be about $700-$750 total, not counting utilties.

Has anyone here had any experience with renting duplexes in bad areas, where you pay all the utilities? I was thinking about just charging $450-$475 a side which would include the utilites. But I don’t want to get into a situation where I’m playing collection agency every month for rent & for utilities. So if anyone had this situation before, how did you handle it? Did you just charge a higher rent & have that include all the utilities or did you charge one amount for rent & then charge a seperate amount for the utilities? If you did the latter, did you make them both due on the same day or at different times of the month?

Keep in mind we’re talking about a bad area here, where $400 -$500 is a lot of money for these people.


Re: If the tenants don’t kill you, the city will ! - Posted by Millie I.

Posted by Millie I. on July 01, 2000 at 20:35:22:

Old run down house, nothing working well or up to code, welfare neighborhood, low rents…

Equals to =

-Major repairs -roof,plumbing,windows,doors,carpets…
-City citations for code violations ( electrical, furnace, backporch upgrades… or they will charge you $2000 fine for each incident, and close your building down)
-Tenants pay you one month’s rent to move in, then wait for you to go through the court system for 4 months to kick them out (free rents and utilities for 3 months, good deal, lets do it again and again)
-You can’t garnish them because these are government benefits, not earned income, they are protected from big bad landlords like you.
-When they need more money, they sell drugs in your building, and get you in trouble with the police.
-You evict one bad tenant, another gets in. They all look honest and pretty when they come, they turn into monsters in your building. Oh, don’t bother with better tenants, those won’t even walk near the neighborhood.
-When they get evicted, they move in with each other, so you’ll have 3 families in a small apartment crowding each other, fighting and putting holes in your walls, and give you a huge utiltiy bill… it’s OK, the utilities are free, the landlord pays for it.
-You are stuck with no payment, major damages, crime and gangs, and a gun from city hall to clean up your act!

I WON’T buy it if I was you,
Millie I.

Re: Anyone have any experience with rental duplexes where there’s only one meter for everything? - Posted by Jim Rayner

Posted by Jim Rayner on July 01, 2000 at 16:59:28:

We rent buildings with up to 10 units sharing the same utility services. While it can be somewhat risky in that you have little control over the habits of your tenants there are some measures you can take to help you to keep control over the cost of the utilities. Many of the measures you can implement have a small one time cost that over time will generate significant cost reductions. Examples would be water saving aereators for the faucets, water saving shower heads for the showers, and regular maintenance of toilet tank flappers and fill valve assemblies, and faucet leaks can all significantly contribute to cost controls for water and sewerage services. Common area lighting should be florescent where ever possible. Incandescent bulbs can all be replaced by compact florescent bulbs. Outdoor light lighting can easily be put on daylight and/or motion sensors. Tenants wishing to have air conditioning can be charged more than those who do not. Properly calibrated thermostats and additional inexpensive heating controllers can reduce heating bills by as much as 40 percent. Good preventative maintenance of the heating equipment will also provide significant savings. Most utility companies offer free audits and many offer free energy conservation upgrades and rebates for improvements.
To develop a budget you should request a two year history of usage from the utility companies serving the building. With this data you can formulate a pretty good initial budget in order to determine a fair rental rate that includes the utilities.
You can elicit tenant cooperation through good communication and demonstration of your resolve to keep the utility costs under control, after all they are in effect paying for those utilities and they need to know that. In our buildings that have common utilities we have a provision built into our month to month and one year lease rental agreement that makes it a violation to waste utilities ? CARE OF PREMISES - The Lessee shall not paint, decorate or otherwise embellish and/or change and shall not make nor suffer any additions or alterations to be made in or to the leased premises without the prior written consent of the Lessor, nor make nor suffer any strip or waste, nor SUFFER THE HEAT OR WATER TO BE WASTED, and at the termination of this lease shall deliver up the leased premises and all property belonging to the Lessor in good, clean and tenantable order and condition, reasonable wear and tear excepted. No washing machine, air-conditioning unit, space heater, clothes dryer, televisions or other aerials, or other like equipment shall be installed without the prior written consent of the Lessor. No waterbeds shall be permitted in the leased premises.? Should the costs get out of control, by virtue of the month to month tenancy, we can increase the rent with a 30 day notice this is explained to them regularly and any increase shall be suffered by all tenants using the shared services in proportion to their unit?s square footage. This is not a threat but a promised reality and when it?s a demonstrated reality you would be amazed by the results. We have even gone so far as to terminate tenants who repeatedly violate the rental agreement regarding the utilities.
You must maintain a watchful eye over the utility costs and react accordingly with proper rent increase notices. The cost of utilities should be paid as a part of the rent and labeled only as rent. While you can evict for non payment of rent you will be unlikely to succeed in evicting for non-payment of utilites

Re: Anyone have any experience with rental duplexes where there’s only one meter for everything? - Posted by Nate

Posted by Nate on July 01, 2000 at 11:54:37:

I agree with GL’s comments. Just wanted to add that in a lower income area, “all bills paid” is often a desirable thing because people don’t have credit or owe the utility company money, and could not have the service in their name. But you are still going to be constrained by the comparables in the neighborhood as far as what rent you can get.

Re: Anyone have any experience with rental duplexes where there’s only one meter for everything? - Posted by GL

Posted by GL on July 01, 2000 at 09:25:10:

The only way to do it is to charge a certain rent which includes utilities then you pay the utility bills. Yes the bills will be very high. Why should your tenants care, it’s free isn’t it?

The amount of rent you can charge is limited by what other apartments are going for. Naturally an apartment with utilities included is going to go for more, but possibly not enough more to make it worth your while. There is nothing you can do about this once you buy the place.

In my area utilities included is the norm. I have apartments with separate meters that were rented ‘all inclusive’ when I bought them. I tried to change to ‘tenant pays utilities’ with a lower rent but had trouble getting tenants so I had to change back.

I lived it this building for 2 years. My tenants electric bills are anywhere from 2 times to 7 times as high as mine.

call the Fire Marshall - Posted by The Donald

Posted by The Donald on July 02, 2000 at 09:13:45:

A neat trick that works in Ontario is simply to have your lawyer contact the local office of the Fire Marshall (usually the town Fire Dept) and have the do a Fire Inspection to ensure the building is up to code.

Cost is $40 and you’ll get a full report about what needs to be fixed to comply - if anything. If your agreement is structured correctly (and the OREA/TREB standard form is) you’ll be able to negotiate an abatement from the Vendor, or terminate the agreement forthwith.

Re: Anyone have any experience with rental duplexes where there’s only one meter for everything? - Posted by The Donald

Posted by The Donald on July 02, 2000 at 09:08:06:

The question is GL: Are you able to show a positive cash flow when you’re subsidizing your tenants’ waste and excess usage?

Re: It’s not a bad idea at all - Posted by Millie I.

Posted by Millie I. on July 03, 2000 at 16:15:35:

…especially if they are willing to come out; but on the other hand, not all fire departments are willing to do you that favor, especially when you are just trying to buy a property. Every town is a little different.