- Joined
- Aug 26, 2010
- Messages
- 380
Hi,
this is my first post so let me start off by saying a big thank you to all the REIN members who post and share your experiences and collective wisdom. Some long-time members have achieved real success yet give so much time back to the multi family investing community through this forum. I`ve sat lots of nights until the early hours of the morning absorbing the knowledge available in this great resource and its been a huge help.
My wife and I bought a 24 unit building in spring (no real estate investing history at all but we`re quick studies and so far its been a good buy). All utilities are provided in the rent and for various reasons the previous owner never changed from electric hot water tanks. The units are heated by electric baseboards and as you can imagine the electricity bill is high (over 35 K/yr). I want to trim this heating cost before winter gets here. This week I had reps from 3 companies come in to give me estimates on changing to an alternate fuel and boiler system, which I should get back in about 10 days. Just to give you an idea, the current system has 6 60 gallon hot water tanks in order to meet peak demand since hot water recovery rates are so low with electric. Meaning I`m paying to keep 360 gallons of water piping hot 24 hrs/day.
I would greatly appreciate your answers to the following:
1 - As a percentage, how much of the utility cost typically goes to hot water for domestic uses vs heating via baseboards? 70/30, 60/40, 50/50?
2 - If you change from utilities included in rent to tenants covering their own power, how much cost saving can be achieved there? The only thing I`ve found so far is dated 70`s or 80`s info from the US that says by putting the power on the tenant you would only have to drop rent by 70 % of the per unit power cost under a master meter system. In other words tenants would increase their efficiency in power use by 30 % when they pay for it themselves meaning the owner could potentially boost net returns by 30 % on utility costs. Anybody have any experience with changing over to a tenant pays utilities system? As a percentage, how much did you have to reduce rent to make it neutral for the tenants?
3 - In my area natural gas is not available so the choice is electric, propane or fuel oil. Anybody have any suggestions as to the best one to use? It seems like fuel oil (we`re on the east coast) is the cheapest and perhaps best option.
4 - Lastly, one of the utility companies has suggested installing in-floor radiant heating on the ground floor as the most cost efficient way to heat. The previous owner has also told me heating use on the 2nd and 3rd floors is very low as the heat rises. The building is 35 years old and probably not too efficient. Does anyone have any experience with this? If the costs aren`t too high I like the idea as I thought it would be more attractive to the seniors who are my ideal tenants. I was thinking of having the ground floor apts with utilities included since this seems important to seniors and metering the 2nd and 3rd floor units.
Thanks again for all your posts,
Tris.
this is my first post so let me start off by saying a big thank you to all the REIN members who post and share your experiences and collective wisdom. Some long-time members have achieved real success yet give so much time back to the multi family investing community through this forum. I`ve sat lots of nights until the early hours of the morning absorbing the knowledge available in this great resource and its been a huge help.
My wife and I bought a 24 unit building in spring (no real estate investing history at all but we`re quick studies and so far its been a good buy). All utilities are provided in the rent and for various reasons the previous owner never changed from electric hot water tanks. The units are heated by electric baseboards and as you can imagine the electricity bill is high (over 35 K/yr). I want to trim this heating cost before winter gets here. This week I had reps from 3 companies come in to give me estimates on changing to an alternate fuel and boiler system, which I should get back in about 10 days. Just to give you an idea, the current system has 6 60 gallon hot water tanks in order to meet peak demand since hot water recovery rates are so low with electric. Meaning I`m paying to keep 360 gallons of water piping hot 24 hrs/day.
I would greatly appreciate your answers to the following:
1 - As a percentage, how much of the utility cost typically goes to hot water for domestic uses vs heating via baseboards? 70/30, 60/40, 50/50?
2 - If you change from utilities included in rent to tenants covering their own power, how much cost saving can be achieved there? The only thing I`ve found so far is dated 70`s or 80`s info from the US that says by putting the power on the tenant you would only have to drop rent by 70 % of the per unit power cost under a master meter system. In other words tenants would increase their efficiency in power use by 30 % when they pay for it themselves meaning the owner could potentially boost net returns by 30 % on utility costs. Anybody have any experience with changing over to a tenant pays utilities system? As a percentage, how much did you have to reduce rent to make it neutral for the tenants?
3 - In my area natural gas is not available so the choice is electric, propane or fuel oil. Anybody have any suggestions as to the best one to use? It seems like fuel oil (we`re on the east coast) is the cheapest and perhaps best option.
4 - Lastly, one of the utility companies has suggested installing in-floor radiant heating on the ground floor as the most cost efficient way to heat. The previous owner has also told me heating use on the 2nd and 3rd floors is very low as the heat rises. The building is 35 years old and probably not too efficient. Does anyone have any experience with this? If the costs aren`t too high I like the idea as I thought it would be more attractive to the seniors who are my ideal tenants. I was thinking of having the ground floor apts with utilities included since this seems important to seniors and metering the 2nd and 3rd floor units.
Thanks again for all your posts,
Tris.
