Re: Fully Rented When Purchased - Utility Question

Re: Fully Rented When Purchased - Utility Question by David on March 13, 2012 @08:55

MichiganDave - Yes I did get SD and M2M leases from previous landlord.

As far as rent increase. It is kind of a unique building in that the units are only 550 sq ft, but they are two bedrooms. Wouldn't it make more sense to temporarily decrease the rent rather than, add utilities, lose the tenant and possibly miss out on rent? Lose $25 a month or $450 for one vacant month?

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Re: Fully Rented When Purchased - Utility Question by Anonymous on March 13, 2012 @10:09	[ Reply ]

Here then is the question. Do you want to keep these tenants? Do they pay rent on time and are they quite. If it is a peaceful building with no troubles and everyone pays on time then you are golden. So you now have $1800 cash flow per month? Could you be making more?

Re: Fully Rented When Purchased - Utility Question by Bryan (Ia) on March 13, 2012 @10:30	[ Reply ]

I don't know your market, rates or demand. In this economy, those are important factors to know before making the decision. I can guess that the rent are way below the market rate. The T's most likely would not be able to find another place for the same money or even close. You can find the HUD FMR @ http://www.huduser.org/portal/datasets/fmr/fmr_il_history/select_Geography.odn From a random county pick (Jefferson Co, Oh) the FMR is $584 for a 2 bedroom apartment. Plus utilities. Besides the comparable local rates and demand, I would consider making the Ts pay for as many utilities as possible. Is the gas separately metered? Is the cable independent accounts or one split to the four units? Is the WSG split or only one? It is hard to believe that the electric is only $25/month in an occupied unit. If that is all, your rates must must be significantly lower than mine. An occupied one bedroom here will average $50+ in the winter and more in the summer with the AC.

Re: Fully Rented When Purchased - Utility Question by Jake on March 13, 2012 @12:18	[ Reply ]

"Wouldn't it make more sense to temporarily decrease the rent rather than, add utilities, lose the tenant and possibly miss out on rent?" David, if the previous landlord was paying the utilities you can bet they were being used and abused to the max. You will find that the rate of usage will dramatically reduce when the tenants start to pay their own bill. This alone will take some of the shock out of it. Stop thinking about a rent reduction. Just give plenty of notice that the utilities will become the responsibility of the tenant. Make it sound like you are doing this instead of a rent increase.