Hey there, wanted to get some thoughts on trash bill back. I’m taking over operations for a park of about 80 current residents, and the trash bill is very high so I am thinking on passing this expense to residents (Parks already do in the area). I did my research and found a company that offers a significantly cheaper service but bills directly to the community owner, and another one that is interested in doing direct billing but at a higher cost.
So the options are:
I take the cheapest service, and then individually bill back the service to tenants. This will go hand in hand with water/sewer costs, but it will also be a less costly alternative for tenants (19/mo). Problem would be loss of collections on this.
I go with direct billing, but the bill would be higher for tenants (25/mo).
My questions are: Which option would you go for and why? To me direct billing seems like the winner, cuts the park operator out of the loop, but I’m thinking 25/mo may be too steep for trash services. Realistically I’d like to save my residents money here, but wanted to hear thoughts if this cost is reasonable to parks that you guys operate or if you did something similar to this and how it went.
I’m all for paying a premium to keep things easy and simple, but $25 down to $19 is a 24% savings on the trash bill. Across 80 units, that’s a $480 monthly savings which is big money. For that wide of a gap I would personally bill back the residents and deal with the hassle to save the residents some money.
Also, check with your attorney, but you might be able to bill back more than the $19 you’re paying per unit, in which case you could provide a markup that more than covers collection loss and administration hassle.
Got an update. I’ve been aggressively negotiating the bill, and got back a rate that is about $15.5 per customer with a rate that will increase 5% in year 2 and 3. But need to commit for three years.
My idea was I could take that then bill back the resident 17.5, which seems reasonable for admin fees.
Personally I might bill back the residents closer to $21-$23. That billing is still reasonable, fair, and a good deal for the residents, so might as well charge it if you legally can.