Hi guys, This is my 1st post. I look forward to all of the great knowledge on this website.I have a 20 space park in Idaho Falls. Currently, I am paying for the water (1 master meter on water).Instead of adding 20 separate meters, can I divide the water bills equally and bill back the tenants?Thank you.Tony
Your answer is - probably… BUT you must check all of the rules and regulations if your doing this. In some states there will be requirements for you to fix leaks, keep copies of water bills on site for tenant review etc… So the answer is probably yes- but check the rules on utility allocation.
Enacting RUBS generally does little to encourage conservation. Which means ‘all’ you will accomplish by billing everyone equally is raising your revenues. You will have no impact on your expenses. I would suggest investing in water meters. They cost approximately $200 installed, and you can find out much about them by searching on ‘water meters’ on this forum.Here are the results from a recent acquisition of ours at the per-space level:Park when we acquired it:* Previous park owners were paying $83/pad in water. No meters, no RUBS, no nothing. Just free water with the lot rent.Park now:* Installed a meter at every lot. ($200 parts and labor included)* Tenants now pay for water they consume, which has dropped to around $50/pad* Raised lot rent $25* Reduced my water bill by $83-$50=$33So my profits per pad per month have increased by $33 (reduced payments to the water company) + $50 (tenants reimbursement for the remaining water usage) + $25 rent increase = $108.My alternative would have been to save the $200/pad meter cost, and just bill everyone the $83. While that is a nice monthly ROI of ‘infinity’ ($83/$0), it’s just not bringing as much to my bottom line as investing the $200 and being able to reduce my expenses $33, bill $50, and still haver room to bump rents $25. I’m $108 - $83 = $25/mo. better off for having installed the meters. And my tenants are $83 - $75 = $8/mo. better off for being encouraged to conserve. And the environment is better off with roughly 1/3rd less water usage.Only installing water meters gets you both an increase in your top line, and a reduction in an expense line. Our ROI of making the meter investment vs. just doing RUBS billing is 12.5% ($25/$200). Not a bad rate of return every month.Plus, encouraging water conservation is the right thing to do environmentally. It is nice when your bottom line and the environment are on the same side of the equation.To your continued success,-jl-www.lillyandcompany.netJoin my LinkedIn Group: Mobile Home Park Investors
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If you are trying to fill lots and other parks in the area do not charge for water
that would put you at a competitive disadvantage?
It would. So perhaps you lower your lot rent and bill for water. That’ll put you at overall parity with your competitors (tenants may even favor you given your lower lot rent), yet your water expense will be lower because you’ll be encouraging conservation, and you will make more money by virtue of your lower cost structure, and, again, the environment will be better off for your actions.There just is no scenario I can think of under which it does not make sense to bill for water. As the Nike ads used to say, ‘Just Do It.’
Thank you guys so very much.I really appreciate all the help!Tony
I disagree, I’ve done RUBS in my park and use is down around 30%. Based on number of occupants per unit.