I have recently purchased a mobile home park and the biggest bill by far is the water bill. Currently the water is included in the lot rent. I would like advice on my best option to decrease water usage by tenants vs increasing lot rents. The water usage has increased about 5-10% per year for the last two years. I have had the park checked for a leak and they cannot find one. So options are:1) Increase lot rent with a letter to tenants explaining why2) Keep lot rent the same but send a letter explaining that it will be raised in six months if water usage doesn’t decrease (hopefully self policing)3) Incentivize the manager to be the water police by offering varying bonuses depending on decrease in water usage.4) Submeter water which has been bid out at $500-1000 per pad (30 pads total). In my state the lot rent has to be lowered for one year to account for the water bill. Thus about a 48K hit in year one but savings of 16K thereafter.Thanks in advance
I personally would bite the bullet and submeter. Then after the one year period I’d raise rents to $10 higher than they currently are before the decrease. Pricing for meters seems high too.
With such a small park and since you furnish the water do a home inspection of toilet flappers and overflow pipe and if needed install the flapper and adjust the float for free. Then see if that makes a different and make sure you do not have a leak that is not being detected on your lines. Than think about water meters. We have no individual meters in our parks since we diligently work with our residents and our water cost (elec. and chemicals) for one park with over 140 sites is less than $190 per month.
$500-$1000 per meter seems way off base. I’ve been buying badger meters that run $80+, and installing a water meter is not a particularly tricky or timing consuming job. The most important part seems to be making sure it is very well insulated and heat taped in the winter.My instincts say options 2 and 3 won’t be particularly effective.Many investors have switched to a RUBS system and seem quite happy with it. They take the water bill each month, divide it by the number of homes, and bill each tenant back based on that.
Your easiest would be to increase the lot rent and explain that the water bills have gone higher. The other option would be RUBS and it takes 30 minutes to 1 hr on a monthly basis. If you do go with RUBs, we have chosen the “number of rooms” in a mobile home and not the number of tenants (which vary wildly) in one of the four options in Texas. You have to follow the procedure correctly on RUBS.
What does RUBS mean?
I would recommend separating the monthly water charge from the monthly rent fee and increase the water fee to cover the costs. Simplest and most direct plan to recoup your costs. It is the way we do it and we increase the water fee as needed on a yearly bases. At the same time offer to do an inspection of each home to locate sources of water waste.
I sub metered a park about that size last year, all in it cost me about 5k. We give them an average household usage per day and anything above that we bill them for it monthly. I am billed by the city on total usage. My avg. mo. bill went from about $3000 to $750, and tenants are paying for some of that.The best way to make tenants responsible is if it cost them for being irresponsible.
MikeC, I love your statement:"The best way to make tenants responsible is if it cost them for being irresponsible."I agree with MikeC to submeter the Mobile Home Park.We had one Tenant whose water meter was just spinning and spinning. We happen to have a Plumber on-site so we asked if we could go into their home and check on the water usage. We found out that one of their toilets was just running and running and running. We turned off the toilet until they could fix it.We wish you the very best!
I have a really hard time with the number you have to submeter the park. Unless your putting in city meters with wireless remote reads that bid is really high. You should be able to submeter for about 150 - 175 per lot, materials and labor included.