I am looking at a park in Kansas City Mo and the water bills are staggering! It averages 136 per lot. The park has a brand new water system. Reading a few news articles it seems that the city didn’t keep up on infrastructure and now are raising rates to try and pay for it. One article said that the rates would continue to go up through 2022.
If I buy this park and the rates go even higher my concern is that all my rent raise potential will go to the city. Also what stops the tenants from moving to another part of the metro where the water bills are normal. This park has major occupancy issues already and is in default.
Does anybody own a park with this problem or heard of this issue?
Thanks
Try contacting the zoning and water dept to see if they may assist in checking the water lines and new install. Its likely a no - but if the park is ugly and has an occupancy issue they might be more willing with a new investor coming to town to make things right. The people in those offices might have an idea of what the issue is or has been.
Most cities have aging infrastructure that they never bothered to properly budget for they simply kick the can down the rd. In the next 10 years rates will have to be raised to cover these differed captial projects. Many times the rate increases will be staggering. The only two solutions are submetering and passing the cost through to the teanants or the park having its own water/ sewer system. This is one reason I like private utilities. Submetering is great assuming the city is doing a good job operating and budgeting for capital projects
Also just because the park has new water lines doesnt mean you dont have a water leak. Usage should be 100 to 150 gallons per day per home.
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RE: Water Bills through the roof !
Hello,
Many municipal suppliers’ “postponing” needed upgrades in their water infrastructure often lead to large unplanned spikes in the cost of water/sewer service, that are passed on to the consumer. In addition, even if well thought out future planned rate hikes are in place, the escalations often include additional increases to offset future conservation. The water/sewer rate increases are needed to maintain net profits and are often set by the Municipal Bonds, used to finance the infrastructure.
Simply stated: As water/ sewer costs go up, People will use less, Therefor the supplier will have to charge more for the lower usage.
The best practice, sub-meter your MHP pass through the water/sewer charges: Educate and keep your residents advised of the rates their municipality is charging; You as the owner/manger and your residents are both on the same side; You’re proactively trying to reduce the residents’ total rental expense.
We’re here to answer your water sub-metering questions.
Sincerely,
Dan Helton
President
Southern Water Management
727-827-4509
Dan@SouthernWaterManagement.com
As one who has seen Kansas City’s operations, my suggestion is to avoid the city proper. It is one of the most mis-managed cities in America. Living in KC involves not only high utilities, but also a 1% earnings tax, and terrible services. The snow plowing may not get to your park on any particular day. It’s not unusual to have blackouts due to aging electrical infrastructure. It’s pretty easy to go just a few miles and be on the Kansas side, or north or south and be out of the KCMO nightmare.
Thank you to all who chimed in, I decided this park was a sinking ship and am going to let it sink. Thanks for the help in avoiding a disaster investment. On to the next one!