Well, Septic, Bill-Back?

We have a 14 pad park that is currently at market rents. The park is on well and septic. Is it possible to bill-back the operating costs incurred for these utilities? 

Of course.  Your wells are probably electric 2hp motors or similar that probably consume <$5/pad/month in electricity, so it’s probably not worth submetering in an attempt to reduce your bill.  But if you see the water as an additional profit source (and when you say you are at market rents, you mean comparing rent AND water costs to your competition and they bill too), then you’ll need to install water meters on each home and then read them every month and compute a bill.  This activity could be beyond your manager’s capabilities, FYI.But the most important thing to keep in mind is that when you start billing for water, you become a ‘utility.’  This will subject you to additional water testing regulations - which vary from state to state - and may make the whole endeavor a poor use of time and money.  Ask your state’s MHA for guidance.Good luck,-Jefferson-

I see water and septic (or sewer) charges passed back all the time.  For the last few I’ve seen, the owner passed back a flat monthly charge back to each resident which ranged from $20 to $60 per month. I imagine this could be a wide price range depending on the market.   The homes were not individually metered with one park being municipal water/sewer and the other being private well / municipal sewer.  The key is how does the total monthly rent (lot rent plus water/sewer) compare to other parks? 

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We could go up another $15 and be comparable.  Sounds like a flat fee in addition to rent for well/septic would be much simpler than installing meters. right?  I should mention we’re just starting to turn this park around. (unreliable tenant base.) Should we wait till we’ve done some house cleaning and its more stabilized? maybe 1 year?

I personally would do it now. Bad medicine is best given all at once. This may help push those that were teetering on the edge of deciding to leave.

After
attending F and D boot camp in 2012 I added meters to my 22 space park in
Florida. I bought Neptune T-10 meters on eBay for $30 each and paid the
managers husband $30ea to install. Initially there was resistance. I have one
Well and seven Septic systems. The well requires $400/ mo. monitoring, $100 per
month chemical and $100 per month electricity = $7200/yr. The collection of a
water bill is NOT a profit source it is just a pass-thru. I wanted to collect
the expenses without raising rent, and I wanted to reduce the septic charges (i.e.
pump outs when water was continually going down the drain). 

The water
billing is on a excel spreadsheet and has a fixed and variable expense
component. So the $400 monitoring is divided equally among the lots even if
they used no water. The electricity and chemical portion is divided in a ratio
to the water use.

Additionally
I reserve $75 per month for septic pump-outs, which will allow me to pump all 7
tanks once every three years.

I
explained to the tenants that to be able to keep rents low everybody as to pay
there fair share. Some tenants were dumping GREASE down the drains etc.

 

So what
has the meters showed me?

 

1)     1) Water use varies greatly
per home. The US Gov. says 80-100 gallons per day per person. I have people at
1/3 this number and people at 2 times this number. Also the tenants own the
homes and some have a higher density per home than others, this really affects
the water use.

2)     2)Tenants have been able to
repair their water leaks that were spraying on the ground.

3)     3)We had a Septic System
failing. After investigation of the water meters we found that one trailer had
a water leak. A toilet that allowed fresh water to continually go down the
drain. This overloaded the septic system. Fixed leak…no more septic problems.

4)     4)After number 3 we conducted
leak tests at each trailer. We gave each tenant dye tablets to test toilet
flappers (several failed and tenants replaced flappers). Additionally we had
the tenants turn off all faucets and verify that meter was not spinning. This
identified other leaks that were repaired by tenants. 

 

So for my
small capital investment I have been able to pass-thru the water expense and subsidize
the sewer expense. I have not needed to pump-out one septic since water meter
installation two years ago (knock on wood).

 

Before introducing a “fee” for water read over your state landlord/tenant regulations to confirm it is allowed.We charge a $20 flat fee per month for every tenant that is kept as a separate payment from rent. We do not allow the tenants to include it on the same check to insure it is clearly viewed as a separate charge. 

THANK YOU–I love the specific recommendation of a product. I am considering metering water so I can know what’s going on with my tenant’s water usage and know what’s going on, but I’m hesitant to expose any water pipes outside of the skirting because–Illinois. I suppose I could pay more and get meters that I can read remotely, and they could remain under the trailers. Any recommendations on those? Any that I could also shut down water to a home remotely in case of a leak? Or I can shut down the park and fence it for my horses to have pasture. They don’t mind walking up to the barn to drink out of a common trough and they don’t care if they never get a bath. Decisions.