Water bills are killing me! Anybody out there putting coin-ops in SFH for some extra income? Any Negatives in doing this? :help
My first question is why are you paying the water bill if it’s a SFH? I understand several smaller multi-unit buildings will have a single water meter because that’s how they were built and it costs several thousand dollars to split them. If you have a SFH, the tenant should be paying all utilities.
Do your tenants provide their own washer & dryer?
Here are the negatives I see to your idea:
- You’re putting in a w&d for tenant use. You provide the hook-ups. If they want a w&d, they can supply it.
- You’re responsible for fixing your w&d that you’re supplying.
- They sell the coin operated machines at Lowe’s & HD, but they’ll cost you more than a regular set. So now you’re providing a more expensive machine, but not of really any higher quality. You’re just paying more for the coin-op feature.
If you buy a multi that has a laundry room, I can see messing with the coin-op machines to offset your water bills. In a SFH, it should be the tenant’s responsibility to provide the w&d. If they can’t afford it, I’m sure there’s a laundromat somewhere nearby.
‘My first question is why are you paying the water bill if it’s a SFH?’
The city will put a lien on the property if the water bill is not paid. No way am I putting that in the tenants control.
Do you build an amount in the monthly rent to help cover your water bills? I would think most other LL’s would not pay for water bills. What about putting in your lease that it’s the tenant’s responsibility to pay the water bill, but the service stays in your name? You could bill them for the proper amount and make them pay you. You could send in the payment each month so there’s no issues with the city…whether the tenant paid you on time or not. I’m surprised about the lien. Our city just turns off the water until the bill is paid.
I like the billing idea. I could write it into the lease, something like…“tenants agrees to pay water bill which will be billed to them to be added to the next months rent.” Thanks for the help.
My SFH lease includes a clause that tenants will pay for all utilities including water and sewer, payable within 5 days off receipt of the bill. However, I keep the water and sewer in my name to ensure no liens are placed on the property. I send the tenant a copy of the bill with a letter requesting the “payment within 5 days in accordance with lease section 5.2-3” so that “I can pay this bill ASAP and the township will not turn off the water”.
jmd_forest - so it seems you are almost doing the collection work for the water company. Does it work well?
have you thought about escrowing money - similar to what the banks do with taxes and insurance? The benefit is that the tenant would pay every month a fixed amount. Their total rents+utilities would not change from month to month. You would calculate the monthly amount based on the average spending per month + a little bit more to account for variations/increases. You could even offer interest on the money they escrow with you and send them a check every year… :O) Would this work? I would still include in the lease that they are fully responsible for the payments though.
Actually - would this work for multi-family properties? Instead of lumping the utilities with the rent, you could charge less rent and then add the escrow for utilities. They would still pay the same amount every month, but they would fee their rent is less than if they had to pay everything together… What do you think?
I think the key here is to avoid properties where the utilities aren’t split. In larger multi’s, this will almost never be an issue. I can’t recall ever hearing of a larger multi-unit complex that didn’t have the utilities split. Most of the time you run into single meter buildings is for the smaller ones (like 6 doors or less) where someone didn’t want to spend the extra money when it was built.
There are “equalizer” plans with the utility companies that will achieve the same result you’re suggesting.
I have seen those “equalizer” plans with power companies, not water… But if they exist, this might be a way to go… My gut tells me it is better to have the same amount charged every month so the tenant can’t say he didn’t know the water or power bill was too high… But again - I am not talking from experience… :O)
And thank you for sharing the info about large multi-family properties. I didn’t know they were typically individually metered…
Have a nice evening!
Yeah. Just thinking about some of the different complexes I’ve rented from over the years. They all had separate utilities. I was referring to the power companies for the equalizer plans. I’ve never heard of it for water either. It may exist somewhere.
The water bill for our building is typically around $90-120 / month. Not bad for six places. That’s why I don’t sweat the water bill too much. We advertise that our water/sewer/trash is paid. I don’t build extra money into the rent for it because the tenants only see the dollar amount for the rent. If someone else is advertising a place for $300/mo without water being paid, they’re not going to pay me $330 just because I provide water. I’m sure there are a lot of people who wouldn’t even ask about what’s included to be able to compare apples to apples.
The city putting a lien on the property for unpaid water bills, is this standard throughout the country? I am curious if the water bill in the renter’s name, how can it become a lien on the property.
The owner of the property is ultimately responsible for the water regardless of whose name is on the bill. Remember you are dealing with the city not a power company. They (the city) plays by a different set of rules. Think of it as another form of taxing you.
I offer a similar kind of deal on my property but the rent is higher - actually much higher.
If the tenant wants a fridge it’s 50$ extra, if they want washer/ dryer its 40$.
Of course all utility costs are extra.
They do keep complaining abt the washer/ dryer and A/C using too much power & water, i just BS my way out of it.
Usually quote some BTUs or wash cycle suggestions etc.
It depends on the city, some cities in my area hold the landlord reponsible, others do not. You can have them send you a duplicate bill even if they are in your tenant’s name. Then you can see right away if it is going past due and address accordingly. Never pay water or any utilities if it can be avoided.
In Colorado we can notify the X-cel Energy and the local city whom provides the water, that we want to be notified if the utility bills are past due. The bad news is that I had one tenant whom never paid anything on time, including the rent. She thought due dates were optional. She is gone. All my SFH leases provide for the tenannts to pay the water and sewer bill to the City. I wouldn’t mess w/ a coin op unless you had a multi unit property where it can bring in an additional $100 + per month extra income.