Posted by Jay on February 14, 2007 at 12:38:06:
Since if your units are poorly insulated (etc.), you’ll lose that money regardless of who’s paying the utilities. (Lost rent, if the tenant pays, since they certainly wouldn’t want to pay what you want to receive if they also have to simultaneously flush utilities $$ down the toilet)
tenant’s utilities KILLING me. - Posted by frankster
Posted by frankster on February 07, 2007 at 16:56:45:
in his infinite wisdom, the prior owner of the 4 unit building i recently purchased(in Illinois) agreed (in the lease) to pay the gas/electric for ONE of the units in the building. the rent on this unit is 450.00, but the utility bill the first month i owned it was 350.00. ouch. the current bill (on the ONE BEDROOM unit) is 700. double ouch.
this is outrageous. i am now essentially PAYING this tenant to live there. this is killing me (emotionally, and financially).
my prop. manager sent a letter to said tenant informing him that his 1 year signed lease expired on the first of january and that in 30 days, he would have to pay his own utilities. i just got a call from her(my prop. manager) and she told me that i CANNOT, in fact, turn off the utilities in my name.
the good news is that he “says” he is moving out (i would too, if i had to pay such a high utility bill), but i’m not holding my breath. any bright ideas? anyone go through this before? he also hasn’t paid rent yet (its the 6th of the month). i guess this is my baptism as a landlord. it sucks…
Re: tenant’s utilities KILLING me. - Posted by IB (NJ)
Posted by IB (NJ) on February 11, 2007 at 11:18:48:
And in your infinite wisdom, you failed to do the proper due dilligence.
Not to kick you when you’re down but it’s important that you admit your culpability here. It’s the only way you’re going to make sure that this doesn’t happen again. Unless you want to go through the rest of your REI career and life blaming others for something you failed to do.
Fix the problem and consider it a lesson learned.
Re: tenant’s utilities KILLING me. - Posted by DJ-nyc
Posted by DJ-nyc on February 07, 2007 at 21:39:23:
frankster,
Welcome to the world of Landlording!
Did you say “1 year signed lease expired…”??
Sounds like time for your very first EVICTION. Talk about baptisim, you will be nailed to the cross if you don’t learn the Landlord tenant laws in your state of Illinois fast!! Get to your real estate investment group and talk with the experienced Landlords.
In Nyc, for a 1-4 with no lease I can start a Holdover petition which sues the tenant for “possession” of the premises. I would also tell the guy either he pays the gas bill or he has to leave immediately; after all the lease is over.
Its like your first year in High School, get to know a Senior or two to show you the ropes.
Good luck,
DJ-nyc
Re: tenant’s utilities KILLING me. - Posted by frankster
Posted by frankster on February 11, 2007 at 21:08:12:
thanks for the responses. i think that i was unclear in my post, however. no one is to blame for this situation but myself. i am blaming no one. the utilities were factored in while assessing the property. the extra 350 this past month, however, was unforseen. i think that i originally posted to vent some frustration and to share my experience with like minded people…
i guess some of you out there have never made any mistakes (or that is the perception i get from SOME of your responses). YES, i will look more closely when assessing my next property, but i am sure that i will make a mistake in acquiring/running that property, as well…it’s called learning.
Lesson Learned - Posted by Jimmy
Posted by Jimmy on February 08, 2007 at 07:29:55:
not to kick you when you are down, but here are a few thoughts:
anytime you buy a rental where you have to pay ANY utilities, you MUST get on the phone with the utility, and see what the average bills have been. The seller WILL lie to you about these numbers.
when computing an offer price for such a property, utilities are not part of the normal expense load (insurance, taxes, maintenance and repairs). Make a separate subtraction for anticipated utilities.
Definitely look into separating the utilities and installing separate meters. I have done this in a number of properties. Sometimes its easy. Sometimes its not. If it costs you $5000 to re-wire a duplex, and you are paying an average monthly bill of $200, that $5000 will be well-spent.
Re: tenant’s utilities KILLING me. - Posted by IB (NJ)
Posted by IB (NJ) on February 12, 2007 at 24:07:51:
Sure we’ve made mistakes Frankster (and continue to do so). I think we were just waiting for you to accept responsiblity in this fiasco which you did…in THIS post.
Why not offer the guy some cash to move out now so that you can get a tenant in there asap to help with the utilities.
Re: tenant’s utilities KILLING me. - Posted by frankster
Posted by frankster on February 12, 2007 at 01:35:38:
i went into this KNOWING what the monthly utilities were (even in the dead of winter). i went over the previous year’s bills and expected a monthly bill of 350, or so (i still say ouch…LOL, but the cash flow was still decent). its the DOUBLING of that utility bill that was unforseen, and YES, i see how i screwed up. next time - no paying utilities for any of the tenants. i do chalk it up to lesson learned.
he says that he is moving out this month (we’ll see) and my property mgr. has given 24 hr notice and inspecting the property tomorrow. i guess i will take it from there and make a decision on what to do asap…