Tips for Saving Money on Utility Costs on Multi-Family Properties
There’s no doubt that owning multi-family properties is an excellent investment because, with a duplex or apartment building, more doors equal more income.
Although multifamily is a smart investment, the utility costs can be a “killer” if you’re paying those utilities yourself that’s why in this article, we will provide you with tips for saving money on utility costs.
1. Lease or Rental Agreement
First, make sure the lease is set up for tenants to pay any utility that isn’t shared. This includes water, heat, electric, trash, etc. A signed lease that’s not written in a way that clearly specifies the tenant is responsible for utilities can be a very expensive mistake.
We have seen many examples where an investor meant to bill tenants for utilities but forgot to include it in the lease. This error could easily cost the owner $2,000 over the course of the year. If you inherit a lease that does not include tenants paying for utilities, get the tenant a new lease with new utility terms as soon as the old lease has expired.
Make a calendar invite for yourself, so you or your property manager doesn’t forget!
2. Electric Bill
Typically, electric can be put in the tenant’s name and billed directly to him or her. However, the tenant still needs to make sure they set up the electric in their name when they move into the apartment or house.
You may have electric in your name to make sure heat is on in the winter or to show the house well. The rule of thumb is to ask to see the electric account in the tenant’s name prior to move-in. If for some reason electric was not in tenant’s name for a month, you can still bill the tenant, assuming your lease is set up properly.
Be careful that tenants don’t turn off electric during their lease with the electric defaulting back into your name. This can especially come up when tenants have stopped paying rent and are in the eviction process.
3. Water Usage
Keep an eye on any water bill that is higher than normal for multi-unit buildings with a shared water bill. As a quick check, we look to see if the water bill is higher than the last water bill received. Water bills can be monthly, quarterly, or any other time span the municipality picks. So, it’s very tricky to tell if the water is high by JUST looking at the number.
If the water bill is higher than normal, we immediately put in a work order for our maintenance guy. We have him do a walk-through to ensure toilets aren’t running continuously and to look for any other water leaks. While this again sounds pretty basic, we have found that you can save thousands for multifamily complexes by checking water usage.
4. Eco-friendly Appliances
If you are seeing water bills higher than what you expect, an additional way to save money is to change out the toilets and showerheads to more eco-friendly versions. We have seen a 15 percent savings on average water usage by making these changes, obviously with variance depending on the situation.
To avoid breaking the bank, make the change during an apartment turn. In general, we try to keep major work when units are already vacant.
Source – Bigger Pockets
Contact Rent Portland Homes Professionals
For more tips on how to save money on utilities, or to speak with us about our property management services, contact Rent Portland Homes – Professionals by calling us at (503) 447-7735 or click here to connect with us online.