My company recently closed on a 125-unit town-home deal in Lexington, KY. At the time of our purchase, the previous owners paid for all utilities for the tenants except electricity. Instead of collecting the actual charges, they simply required the tenants to pay a flat fee of $60. This fee included water, gas, trash, and pest control. The tenants were only responsible for their own electricity. Since the water and gas were not individually metered, on the surface it seemed like a flat fee was a good way to collect fees. In reality, it turned out to be a terrible plan. We noticed during our evaluation of the property’s T-12 that the cost of water and gas alone came in at $160,000. Unfortunately, the property owners were only collecting a total of $80,000 in fees from the tenants. This one item resulted in a loss of over $80,000 for their ownership team.
I shared this. Damn you manch.
https://realestateforums.net/t/bigger-pockets-metered-utilities-add-significant-value/5620/2
You did? Haha, probably while I was still sleeping.
It is fine. I like reading stories like this. This is what @elt1 means by having insider info. Yoy xan beat stocks easily with tricks like this
I think @ptiemann also did tricks like this. But first you need to have a sizable apartment buildings to add value to.
I posted another BP article a while back. You can add value by installing washer/drying machines, and some pretty DIY-ish storage.
Yup. It is smart. With cap rates 2% in bay you might even get crazier deals.