How Much Cost To Have Seperate Utilities
Greetings everybody,
Im interested in an income property relatively cheap, with a very good gross income. but because of the utilites such as gas and electric, there is a gap of $15,000 between the gross and the net operating income. Does anybody have an idea of how much would cost to have seperate utilities for each unit .
Thankx everybody
SofianeCT
Is the property zoned multi family? Does the county or city recognize your property and that it has six units (or however many). Many people splilt up houses into multi family, or they add on to make it multi family, but the county or city does not recognize it as such and can shut it down. Just making sure that they are legit before you spend any money.
Well, to all above, I had the same idea for one of my three units so I called to get the cost of intalling three boilers rather than just the one that services all three. When I got the estimate and the work involved I thought I better think of somehting else to solve the problem. I send a NOTICE to tenants saying " please be informed that as of that date the Landlord will pay up to $1.50 per gallon for the heating oil and tenants will share anything above that. My leases are 30 day so I gave them 2 months to go in effect. On the botttom of the notice I gave them the right to decline or to www.accept.No one moved out, no one complained. They each pay $945.00 for a 2 bedroom plus the electric from their own meter, and share the oil. My problem has been solved and kept my money in the bank.
Good approach.
Ask the current owner, and then call the water and electric company for average usage , also your heating supply, natural gas or whatever do the same. Compare that with what owner told you to get a good idea how HIS figures look. Also figure in a vacancy factor and reserves you intend to keep as things wear out. You have to judge by the age of the systems as was already stated.
Good, you have something picked out, start asking questions, ask the right questions you should have the answers you need.
I am staying low on purchasing at the moment, the market is too high to bring a profit.
If you just want some estimating numbers to start your cash flow analysis, use 30% of your gross rent for operating costs. Use 10% of your gross rent as a vacancy factor. If you plan to outsource property management, use 10% of your gross rent as a management cost.
If your debt service consumes no more than 40% of your scheduled gross rents, then you may want to get more detailed information about this property to make a purchase decision.
When you get specific information about the property and its operating expenses, refine your cash flow analysis accordingly.