# Recently raised rents. I want to bill for water now

I closed on my park in August and raised rents day one by about 30%, bringing everybody in the park up to market. That was a very easy move to increase revenue but my second big play for this 40 lot park is to install water meters on all the lots and bill back water.

My question is this, how long should I wait to start the process? My park has about 15/40 lots over the age of 65 and they were the ones primarily grumbling about the rent raises. They are also the group that pays consistently on time and have been at the park the longest. Should I just pull the trigger and have the meters installed or should I wait a little while to allow the residents to absorb the rental increase? If I should wait, how long?

Thank you.

Do it next year in lue of rent increase

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What are absolute \$ amounts? Iâ€™m going through same thing on park I bought 2 months ago. Already installed meters. W/S passthrough equates to \$75/mth or so, on \$275, 27%. \$75/mth is a pretty big hit. Rent is undermarket by \$50. Going to wait a year and might just do \$25 increase at a time.

@Louvie thank you for that. I was considering doing that.

@mhp The park is in Alabama (low lot rents). So I raised rent to 165 across the board which is pretty much right at market. My water expense per month is very low for so many tenants(at least I think it is) at around 600-900 per month. Doing some simple math on that, the average home would only see a \$20 per month increase, but \$20 is a lot to folks in Alabama.

I find billing for water to be a HUGE pain in the ass â€“ a whole new category of hassles. You have to inform each tenant what the bill is, some people pay for the tenant and you have to run them down, everyone pays a different amount of rent; some over pay by something like \$1.32 and other underpay by some odd number like \$2.63 and you have to keep track of all of that. Everyone hates it, including my tenants, my manager and me. I want my parks to be on auto pilot as much as possible and billing for water is just the opposite.

Hardly worth it when a rent increase would achieve the same thing without all the monthly bookkeeping hassle from now until eternity. I wish the meters were never installed (which cost me \$20k). Tenants are not idiots â€“ they know billing for water is the same as a rent increase.

I disagree and some of these areas charge 50 -100 so the cost is huge. We do the invoice system ( and have tried to autopilot a system around that ) so the tenants are getting the invoice right before they send out the rent so its all included into one.

Two additional benefits i like with this - 1 we use perforated statements so in theory its a back up you get a stub with the payment ( if you can figure out payment allocation)

1. gives you an opportunity to do a â€śstufferâ€ť in the monthly mailing , i.e. we are doing heat tape checks- vacant lot- referral fee- lot rent increase.
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\$20 a month is a pretty cheap a water/sewer bill. Do you see a lot of waste in the system?

It may be more efficient to just do RUBS over install meters. Installing, maintaining, and reading water meters is difficult from an administrative perspective. If you outsource the process to a private company theyâ€™re likely going to charge \$6-8 per lot per month. If the total bill is just \$20 a month, it might be more reasonable to forego the meters.

@Randy_CA I wouldnâ€™t handle the billing. I have a 3rd party contractor that would read the RF data, bill the residents, and then charge the residents the 5 dollar monthly fee. I donâ€™t see the downside from a cost and administrative perspective.

@Deleted_User_ME I really like the idea of using this as an opportunity for a â€śstufferâ€ť. I will give that a try.

@Noel_S I donâ€™t currently have meters installed so I canâ€™t really comment on waste. But the bills are pretty low. As I told Randy, I have a company that will handle all the billing AND charge the residents. Itâ€™s win-win for me. And at 20 dollars a month per lot, I will receive a total return on my investment in 10-11 months. Thatâ€™s hard to beat.

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Who is that third party contractor? The company who put in my meters is Metron. They charge \$5 per meter per month but they donâ€™t collect payments.

Whats the 5\$ for? For them to recoup the cost of the meter ( i.e. they did the install on their dime) ?

I was charged \$20,000 for the instillation of the meters (my former property management company did this without consulting me.) I think they put in something like 68 meters. The \$5 is for reading the meters and emailing us the results. I got them to mail out bills to the tenants but that is extra and I believe they will just charge for postage, but I have not been billed on that yet. They do not collect the payments, but leave it to use to sort all of that out.

If Dominic shares this 3rd party biller, I would be very interested in contacting them. But with \$5 going to Metron and \$5 going to this 3rd party that is a lot of waste; \$5+\$5 x 68 x 12months = \$8,160.

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@Randy_CA Southern Water Management would do the billing as well as collections and then would send me a check minus the \$5 fee. ABT may do something similar.

@Deleted_User_ME The \$5.00 is to record the data and analyze it(meters are RF, sent directly to company). They then directly bill residents and collect. And no they wouldnâ€™t do install on their dime, itâ€™s really just an admin fee.

We have sub metered every park we bought and on average have saw a 50% decrease in w/s usage. Some parks the decrease was a little more but 50% is a good avg to use. Its certainly worth the cost and aggravation.

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This has been a year long project for me. I bought the meters online, and then asked my best park resident who â€śknows everyoneâ€ť if she knew someone to install them, and she knew a plumber who had installed lots of meters. So I ended up paying him about \$1,000 to install the 23 meters. Then I found a new yard guy who charges me \$40/month to read the meters for me and he emails me the readings. I sent reports to the residents, highlighting each personâ€™s usage so they could see how much they were using compared to others. (I have not been billing them for it this year, but immediately the water usage dropped significantly.)

In Florida, we have to drop the rent the value of the water cost, which is a problem if you have to average it based on the usage when it was the most extravagant, of course. Instead, since most of the residents are not water wasters, I decided to include 3,000 gallons a month in the rent, and not raise the rent for 2018, but also not lower it, thinking that the state would find that reasonable if it ever is an issue.

I decided not to hire out the billing because they wanted \$2,000 for setup, and a separate bill for water would be punishing the majority of my residents who are not a problem, and anyway, the have no way to enforce payment so how would that help? For the 3 or 4 who will exceed the 3,000 gallons a month, I will send an invoice before the 1st of the month telling them to add the amount to their upcoming rent checks, planning to return their checks until they include it. It wonâ€™t amount to much (like \$3-\$7 dollars) so I donâ€™t expect anyone to squeal. Yes, itâ€™s a bit hands-on for me to have to send out those few invoices, but those high water bills were way more irritating. So we shall see how this goes.

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@Lopo1

I appreciate the story. Sounds like you made the right call.

I donâ€™t know if this question was already addressed above, but did any of you experience any tenants moving out once you started to bill back the water and sewer bills?

You might need to check your state rules on sub-metering first. If I understand the rules where I am in Texas, I would have to wait at least 90 days between a rent increase and beginning to bill for water. There are also very specific regulations on sub-metering for water, sewer and electric here.

@Gulliver I decided to do a very small rent increase next year(maybe 5 dollars) couples with submetering water. So Iâ€™ll know next August how big of a deal it is.
When I bought the placed and increased rents 30% not a single person left.

@Jsmith
It seems like Texas has all kinds of tenant laws that Iâ€™m not really interested in. But yes, I always consult an attorney before making any big changes.