Renting main floor to a different tenant than the basement

[flyingsquirrel]

Anyone have experience in renting the main floor to a different tenant than the basement?

Provided that you have separate entrance?

How you handle the snow and grasses?

How you handle the hydro and gas bill?

 

[housingrental]

Yes many times



You will find most posters respond the same



It is best to have the utilities individually metered between apartments, with any common area on a third meter



If this is not possible your options are:



Offer units at higher rent with utilities included - disadvantage is potential for overuse from tenants



Offer units with some split of utilities - 50/50 - 40/60 - 30/70 - 40/40/20(landlord, common area) etc.. from one unit to the other with tenants hooking up in there names - disadvantage is when tenant does not pay bill you might be required to step in, get hooked up, and then go through small claims court for utility payments. Other issue is potential for inter-unit conflict from over-use of utilities with one unit being conservation minded and resentful other unit is over-using and increasing bill that they have to pay a portion of.



For grass cutting etc.. same idea - only one unit might be responsible per lease, or you are, or you have it scheduled by week (not recommended) etc.. - each has its pro's/con's - namely cost to provide service for tenants vs potential for things to go wrong if one tenant does not do what is required per lease

 

[flyingsquirrel]

So I can install one meter for main floor and another one for the basement?

for hydro?

How about gas?

Any rough idea on how much it cost to install the meters?

 

[JimWhitelaw]

1) Utilities. There's a utility sharing agreement you can download from this site. Put the utils in one tenants name and they collect from the other. We use this on some of our rentals. Based on the recommendation of other REIN members, we switched some of our shared houses to our name and bill the tenants directly based on a % split and a monthly amount based on average use and subject to adjustment to actual billing. It's more work, but tenants seem to like that system better.



2) Yard work. We generally leave it up to the tenants to decide on a system, but we suggest either a front/back split of work or an alternating schedule.

 

[flyingsquirrel]

So what if the tenant do not pay you the utilities fee under your name? What can you do about it?

What usually is the split? 60/40?

How you charge the tenants? You ask them for cheques every month?

It looks promising.

 

[JimWhitelaw]

Our agreement makes utilities payable like rent. So the consequences for non-payment are the same.



60/40 is our normal split for up/down shared house.



Utilities are payable with rent. A couple tenants pay rent on the 1st and utils on the 15th of the month.



I tend to "sell" the arrangement to new tenants by emphasizing that they have a predictable amount for budgeting and don't have to track extra payments each month. They seem to like that.

 

[housingrental]

You need to go to small claims court

 

[housingrental]

In Ontario it is not same as rent

You have it good in Alberta

 

[dplummer]

As others have responded tenants pay own utilities. As I own a grounds maintenance company I include grass & snow as part of their lease. I have found having my guys on site they are my eyes & ears , property always looks nice, at least on the outside & I've attracted an older stable clientele .



Doug

 

[flyingsquirrel]

SO let's say if they do not pay me the hydro, can I cut it?

Is it legal?

 

[housingrental]

No

You stay paying there hydro bill each month

You need to go to small claims court for amount but you can NOT turn off hydro

In other words - try not to structure your leases this way unless you have to!



[quote user=flyingsquirrel]SO let's say if they do not pay me the hydro, can I cut it?

Is it legal?

 

[flyingsquirrel]

How about I ask the main floor tenant to pay for the bill and I will pay them back 40%? In other words, the rent for basement is inclusive.

I cannot control if they want to pay me or not, but I know I will pay them.

 

[housingrental]

Sounds great!

Until.... main floor tenant cuts off hydro or moves out unexpectedly... then you have liability issues for lack of hydro in lower unit....

Or main floor tenant bails because of overuse of hydro from lower level....

Or units start arguing over cost of bills and you have to deal with it or risk lower tenant bailing from treatment of main floor tenant....



Re my other posts... Try not to structure it this way... You want to pro-actively structure your business to minimize the potential for problems... Not greatly increase the odds of problems...



[quote user=flyingsquirrel]How about I ask the main floor tenant to pay for the bill and I will pay them back 40%? In other words, the rent for basement is inclusive.

I cannot control if they want to pay me or not, but I know I will pay them.

 

[flyingsquirrel]

So in other words, everything inclusive is better?

 

[housingrental]

No

Seperate meters is

[quote user=flyingsquirrel]So in other words, everything inclusive is better?

 

[flyingsquirrel]

I see. thank you so much. Will work towards that direction.

Any idea how much that will cost?

 

[housingrental]

This will vary from property to property

Get people in for exact quotes

 

[flyingsquirrel]

I just want to have a rough idea at this stage. Should I be looking at $300 or $3000?

 

[housingrental]

$2000 +

It'll depend on what needs to be done but could be far more

Get someone in for exact info

 

[flyingsquirrel]

It seems pretty expensive. But if it is necessary, then it has to be done.

thx