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Multi-family per unit utility costs

T

TangoWhiskey

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I wanted to hear what others are paying per unit in utility costs. I have a 24 unit building where heat and hot water are electric generated in addition to lights. Everything is included in the rent.



I am paying 2604/month for electricity. This is 108.50 $ per month per unit for total building utility costs which include a 4 machine laundry room spinning off 700 $/month.



As far as I can tell this is reasonable. What is everyone else's experience? Thomas?



Thanks



Tris
 
I cannot help you with average utility costs but I would switch your dryers to gas as well as your hot water tanks.



This will save you a bunch.
 
Electric boilers are EXPENSIVE.



Try to switch to gas, which is very common in all cold provinces of Canada (i.e. all except BC or oil based E-Canada)



Energetically gas is better than electricity .. hence most cars are gasoline powered and not electric for 100+ years !



Utilities run about $1200 to $1500/unit/year including garbage removal, water(cold), water (hot), sewer, individual unit heating and central hallways / staircase heating. On the low end for bachelors and 1BRs .. higher for 2BRs and 3 BRS.



Thus, your numbers are on the high side, as expected, due to inefficient non-gas heating of water.
 
Thanks for the responses. Unfortunately there is no natural gas distribution in small town Nova Scotia (its a fuel oil economy here). I had several firms give quotes on propane but there was issues with my flue gases and where a chimney would go... I might revisit this if I can't drive expenses lower by switching out old appliances etc.
 
[quote user=TangoWhiskey] quotes on propane


how about oil burner ? might be cheaper too ?
 
This might be a crazy idea but give a geothermal company a call.



My country house was heated with oil. Cost about $500 per month in the winter (brutal I know) until we switched to geothermal, pricey yes but the government rebates really helped. I calculated payback at 6-7 years which would be poor in most investors eyes but payback keeps getting shorter since the price of oil keeps going up. Just my two cents...



Erwin
 
Thomas,

I have a building which costs me close to $1600 per unit/per year.

Would you have a better break down of where the costs of Gas, Electricity, water, garbage be?

Thank you.
 
gas roughly 50-60% .. 20 to 25% the other each .. roughly .. varies by city as some cities include cerain things with property taxes (eg garbage)
 
Depends on how long you expect to have your building, and if you like to do things yourself (ie. if you frequently use a lawyer and accountant or typically do your own taxes and legal agreements), some people like getting into the details of what technologies to consider, how much to invest, whether to use financing. But if you don`t: if you expect there is a 50% chance you will still have your building after 5 years I somewhat recommend the following, and if you expect a 80% chance you will still have your building after 10 years I strongly recommend the following: You could enter into an building systems management agreement (electricity and gas systems), a type of JV (where you provide the asset for development that generates savings over time), where you sell most of your building systems under certain terms and enter into a long-term lease agreement (lease-back) with the service provider that guarantees a lower energy cost and you would also participate in a share of profit (service rebate) in case there are any additional savings.
 
Thomas, Thank you.



It looks like my electricity is on the high end it is more then the gas .....

I pay all utilities.




jboire99


Could you please elaborate a little more on this?

Sounds interesting but I have no idea where to start :)
 
Sure I could expand the discussion or better suggest a next step, this is my email [email protected] if you like feel free to send me yours, please give me a couple of days before receiving a reply
 
[quote user=augustynr1]It looks like my electricity is on the high end it is more then the gas .....

I pay all utilities.
How is building heated ? central gas fired boiler ? central electric boiler ? or baseboard heater, paid by landlord ?



How is water heated ? Electric or gas ? Central or per unit ?
 
jboire99,

Thank you. I will contact you over the email though probably it could be beneficial to all if you posted it in the forum.

robert
 
Thomas,

The building is heated with central gas fired boiler.

The water is heated with gas and is central, we have 4 boilers.

We pay for all utilities.
 
[quote user=augustynr1]We pay for all utilities. Incl. tenants' electricity for toasters, TVs, stove, fridge .. ? Then electricity bill will indeed be much higher .. probably 2x as high as a separately metered building. get it sub-metered. This is most common in most provinces.
 
[quote user=augustynr1]Any idea what would be the cost of that?
Electric sub-metering is about $1000 to $1250 per meter .. less per meter if many meters (say 20+) .. more per meter if under 12 or so ..
 
Thanks so it probably will take me 5 years to recover that.

Would that be correct assumption?
 
Actually, if the landlord saves $60/month or $720/year you get an immediate value improvement. However you may have to lower rents a bit, say $35. So a net savings to the landlord of around $400/year per unit. This translates it $4000 to $6,000 per unit in value improvement, using an 8% CAP rate. Thus: immediate value recovery. Of course, this is not cash, but equity. To tap into equity you need to sell it or re-finance the property showing a better NOI.
 
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