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yikes

Registered: 02/17/09
Posts: 383
Reply with quote  #1 
How do you handle billing if your rental property does not have separate meters for electric and gas?  Do you just estimate what it will cost you and tack that onto the rent amount?  Or is there another way?  I'd hate to pay the heat myself and have people crank it up and then when it gets too hot just open the windows instead of turning the heat down.  My dad had problems like this and not only were the heat bills astronomical, but some of the pipes froze from the window being open, too!  I'm in Minnesota and heat can get expensive...
I'm thinking of putting an offer in on a duplex but there is only one water meter, one gas meter and one electric meter.  Two furnaces, though, and two water heaters...
OHlandlord

Registered: 01/20/07
Posts: 3,537
Reply with quote  #2 
Separate the electric & water.  Replace one furnace with an electric one.  Then only one unit has to have the gas.  You need to get those utilities separate.  If you don't, expect exactly what you think - tenants will run up those utilities that are included.  Figure the costs for doing this into your bid on the property.  Let the realtor know that you need to have this done.

If you must include them, calculate the normal bills, and add 50-100% on top of it for waste.  Add that to the rent and tell them if they use less than that, you will refund the difference to them every few months.  If they use more, they will get a bill split equally.  (Note:  you can't do this in all areas.)

Another option for the water - if it is plumbed right and only one pipe feeds one half of the duplex.  (A plumber could tell you.)  Submeter that side by putting a meter in the basement on that pipe.  When you get the bill from the company and go read that meter.  Split the bill based on how much each unit has used.  Check the internet for submeters.  Warning:  Shut off (lock) any outside taps to prevent common usage.

Example:  One meter for property, but Unit B has submeter.  You get a bill for 100 units of water on the property.  When submeter is read, Unit B used 40 units of water.  That means Unit A used 60.  Unit A pays 60% of the bill (you bill them for that amount) and Unit B pays 40% (bill them too).  Require that the bill be paid to you within 10 days of receiving it.  Then you pay the water company.

I don't like duplexes that don't have separate utilities.  Most LLs don't.

yikes

Registered: 02/17/09
Posts: 383
Reply with quote  #3 
I don't like this either.  I don't want to have the bills in my name. 

If I have two water heaters, and two furnaces, then I'd guess that it wouldn't be too difficult to get two meters for gas...?  I am confused as to why there is two of everything but then only one meter.  Seems weird.  It was not originally constructed as a duplex, it was a single family, but has been used as a duplex for decades now.

Do you know how expensive it is, generally, to get it set up to have 2 meters vs one?
OHlandlord

Registered: 01/20/07
Posts: 3,537
Reply with quote  #4 
Generally, at least around here, if you want 2 gas meters, they make you bring in two lines from the main at the street.  This costs, what with excavation, installing the line, etc!  This is all at your expense.  That is why I suggested disconnecting the gas from one unit and making one all electric. It would be cheaper here to pay $2000 for an electric furnace & $200 for an electric w. heater, than the excavation & lines. If you can't get 2 meters for gas and cant disconnect one unit, then do this.  Make the water heaters all electric.  Remove the thermostats and place them in a locked location where you control them.  Set both at one temperature and divide the bill by the square footage in the units.  Add that amount to the rent of each.  They can't squabble this way as both units were heated exactly alike.  (Of course, I suppose one tenant could run up a bill by doing something stupid - like leaving a window open in winter.)

The electric companies don't charge you (here) for a 2nd drop line to the house.  You pay about $100 for a 2 meter box and the electric company installs the meters for you.  Your only charge is the electrician to separate the lines.  If the breaker  box is already in the basement, sometimes a 2nd breaker box can be placed just next to it and the lines for the other unit simply pulled from the 1st box and installed in the 2nd.  Only an electrician could tell you how expensive this would be since it would depend on how the wiring was done.  If each room has its own circuit, this would be easy.  If not, it will be expensive.

The sub-metering is an option here because the water company thinks like the gas company.  They want 2 separate lines from the main to the house.  Again, expensive for the work.

yikes

Registered: 02/17/09
Posts: 383
Reply with quote  #5 
Thanks, OH, that is very helpful info.   I'm trying to figure out what the history is on this place w/ regards to the meters.  When I looked at the gas meter, it was brand new, like someone just installed it this summer.  Then there is a scar/mark a couple feet away where another one used to be.  So I don't know if there are two lines coming to the house and for whatever reason they switched from two to one or if it's always been one.  But I have a feeling it used to be two for everything, why else would they have two furnaces, two water heaters, etc.  The house is not that large.

One way or the other, I need to get separate meters though.  It's kind of a crazy setup - one furnace is in the basement, and the other is in the attic...?
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