Low Income Duplex (by Deanna [TX]) Oct 9, 2020 6:32 PM|
Low Income Duplex (by Nicole [PA]) Oct 9, 2020 7:16 PM
Low Income Duplex (by Deanna [TX]) Oct 9, 2020 7:30 PM
Low Income Duplex (by 6x6 [TN]) Oct 9, 2020 8:26 PM
Low Income Duplex (by 6x6 [TN]) Oct 9, 2020 8:28 PM
Low Income Duplex (by FloridaNative [FL]) Oct 9, 2020 8:32 PM
Low Income Duplex (by plenty [MO]) Oct 9, 2020 8:58 PM
Low Income Duplex (by plenty [MO]) Oct 9, 2020 9:00 PM
Low Income Duplex (by Robert,OntarioCanada [ON]) Oct 9, 2020 9:09 PM
Low Income Duplex (by Nicole [PA]) Oct 9, 2020 9:12 PM
Low Income Duplex (by Sisco [MO]) Oct 10, 2020 6:15 AM
Low Income Duplex (by Steve [MA]) Oct 10, 2020 6:29 AM
Low Income Duplex (by Tarheel T [NC]) Oct 10, 2020 10:17 AM
Low Income Duplex (by Oregon Woodsmoke [ID]) Oct 10, 2020 10:56 AM
Low Income Duplex (by Oregon Woodsmoke [ID]) Oct 10, 2020 10:59 AM
Low Income Duplex (by Deanna [TX]) Oct 10, 2020 12:08 PM
Low Income Duplex (by 6x6 [TN]) Oct 10, 2020 1:12 PM
Low Income Duplex (by Deanna [TX]) Oct 10, 2020 1:14 PM
Low Income Duplex (by Deanna [TX]) Oct 10, 2020 1:18 PM
Low Income Duplex (by 6x6 [TN]) Oct 10, 2020 1:23 PM
Low Income Duplex (by plenty [MO]) Oct 10, 2020 2:01 PM
Low Income Duplex (by Landlord ofthe Flies [TX]) Oct 10, 2020 5:17 PM
Low Income Duplex (by Robert,OntarioCanada [ON]) Oct 11, 2020 5:44 AM
Low Income Duplex (by Renne [TX]) Oct 11, 2020 2:02 PM
Low Income Duplex (by Deanna [TX]) Oct 11, 2020 5:53 PM
Low Income Duplex (by Renne [TX]) Oct 11, 2020 7:42 PM
Low Income Duplex (by Ray-N-Pa [PA]) Oct 13, 2020 5:02 PM
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Low Income Duplex (by Deanna [TX]) Posted on: Oct 9, 2020 6:32 PM
So, I picked up a new place at Tuesday's tax sale. I tried posting some pictures to my album, but was running into technical difficulties, so, y'know...
It's two structures. The main structure was built in 1945, and started off as a 630-sf 1/1 duplex. The second structure is off the alley, and was built in 1945, and started off life as a 900-sf 3/1 single-story garage apartment. The parking bay has since been converted into a fourth bedroom. I'm thinking it would convert into a smaller 1/1 duplex as well-- throw in a wall, plumb in a kitchen and a bathroom, add two more exterior doors, make a parking pad, and so on. There's nothing in the zoning that would say no.
I'm going to have to rewire both structures, and replumb both structures no matter what.
The street duplex was originally separately metered. The previous owner had knocked out part of the living room and kitchen walls to turn it into a 2/2. So I'd have to put that stuff back into place, but it will be easy.
I haven't spotted a meter for the ADU yet, but there's still the fourth side of the building I need to look at.
I need to look into the water meter to see if it's metered for one, two, or three ways.
I normally cater to people who are one economic step above the sort of people who would be likely to pick up a 1/1 duplex, either the street duplex or the alley duplex. This is my experiment both with my first multi, and a possible step down from my usual tenant pool.
My question to the forum would be--- would my tenants be more likely to be successful if I carry electric and water? In theory, I'd get a greater discount by carrying four units' worth of electricity and water on a single bill, because you don't have all the fees and surcharges x 4 going on. And in theory, they'd be more successful on a tight budget, if I mentally roll in $40 for water, rather than letting them each tote a $80 water bill for garbage/water/sewer. Electric, I'm less clear about.
But at the same time, you have a greater risk of excessive use, since it's not on their dime.
Do you make it clear that if you're charging $x/month, that $y is the utility allowance, and $z is the rent? Or do you just call it a single bill and raise the rent if they're excessive with their usage?
Or do you just make it not-my-problem, and let them carry their own utilities in the same way you would with a sfh, because it's not a big deal to separately meter everything since I'm re-doing major systems anyways?
Any recommendations, advice, or anecdotes-- I'm all ears. :) --137.118.xx.xxx
Low Income Duplex (by Nicole [PA]) Posted on: Oct 9, 2020 7:16 PM
when redoing, separate out.... especially electric and gas (if that's how you heat). I owned many old buildings where utilities weren't separated. They were great cash cows but the oil and gas bills drove me bonkers.
I tried the "utility allowance" ... tenants couldn't grasp more than the very basic and never could understand their payment was $xx unless the bill is higher than $xxx and then you owe an additional $x. --72.70.xxx.xx
Low Income Duplex (by Deanna [TX]) Posted on: Oct 9, 2020 7:30 PM
Sounds very straightforward, and an invisible screening tool as well. :)
Yes, I was thinking about giving them electric heat and an electric hwh, and totally abandoning the gas lines. It's not as cost-efficient as gas heat, but it's one less utility for them to carry. --137.118.xx.xxx
Low Income Duplex (by 6x6 [TN]) Posted on: Oct 9, 2020 8:26 PM
Think about this:
If they decide to play the moratorium game and not pay rent, would you be glad, at that point, that the meters were separated and you were not paying there utilities as well as not getting rent.
Also if that were to become the case, when they get the utilities cut off then you can evict for uninhabitable reasons.
If they do not have to pay the actual utilities company themselves and get a look at the bill then they will not care how much they use, as Robert in Ontario always reminds us.
Do you want to deal with the hassle of teaching them to use utilities wisely or let them be there own teacher. --73.120.xx.xxx
Low Income Duplex (by 6x6 [TN]) Posted on: Oct 9, 2020 8:28 PM
I like your idea of creating another duplex on the property, if you like duplexes. --73.120.xx.xxx
Low Income Duplex (by FloridaNative [FL]) Posted on: Oct 9, 2020 8:32 PM
Don't you attract a totally different tenant if you include utilities?
If these were short term rentals then I understand keeping the utilities in your name and rolling them up in the rent with a cap. But if they are annual rentals I wouldn't include the utilities. If they can't get their own utilities in their own name, that tells you a lot about the tenant.
I would split out the electric and water for each tenant to pay. Otherwise they will run up your bill way beyond the cap and fail to pay the difference unless you collect a huge separate deposit to draw from monthly. JMO --68.104.xxx.xxx
Low Income Duplex (by plenty [MO]) Posted on: Oct 9, 2020 8:58 PM
My sister has four such units. We call it The Compound. I do all the advertising and phone calls, she is the LL. Anyways all utilities are included. We run thru as lot of calls and questions and viewing as $725 for a small space, which includes utilities IS HARDER TO RENT than if the utilities were divided out and rent was $499 and they paid their own utilities. Once we get the right person in there they stay as they find it easy to budget and they dont have to fuss with getting utilities turned on. Getting the keys is simplier. And its easy to budget. And i believe some get "stuck" there cause everything else maybe bigger but when the utilities start get added in its more than they can afford. If it was possible on this property i would have utilities seperated out, simple easy vinyl flooring, just basic. Easy. Sweet. No thrills. Screen screen screen. The right people will pay and stay. Everything seems expensive now to rent and out of the parttimers pay range. But they will save on utilities if they have to pay those out of pocket. My sister has had to "spank" a few who's utilities double once in a while, get them back in line, train them if necessary or remind them someone is watching. Let resident pay utilities . --172.58.xxx.xx
Low Income Duplex (by plenty [MO]) Posted on: Oct 9, 2020 9:00 PM
All electric would be perfect. --172.58.xxx.xx
Low Income Duplex (by Robert,OntarioCanada [ON]) Posted on: Oct 9, 2020 9:09 PM
Stay away from electric heat or anything to do with electric. If coal fired generating stations are phased out then electric rates can easily double. In Ontario it is next to impossible to rent anything with electric heat. It is matter of installing two gas boilers along with a indirect hot water tank. To minimize the cost of piping where separate water meters then commercial pex piping such as Rehau or Uponor. With pex it is possible to manifold where one larger pipe splits minimizing piping and labour costs. With pex it is possible to install a pex sprinkler system. Hot water radiation pex is the most cost effective, efficient system to connect up a heating system. Another option is install high efficiency split heat pumps which can be used for heating and cooling all year round. Upgrading insulation with spray foam. Be cheap on renovations will not be long term where having rental units which have low utility costs will minimize vacancies. A higher rent will be offset by lower utility costs. The objective is to have the highest rent possible. --147.194.xxx.xx
Low Income Duplex (by Nicole [PA]) Posted on: Oct 9, 2020 9:12 PM
plenty is right about the rental amount being too high. I used to rent for $500 plus $100 utility contribution. Then, I got lookers because $600 was too much.
Another downfall on lower end units not having their own utilities. Tenants of this class know every government program out there and get free and/or subsidized heat and sometimes electric. If utilities are included in the rent, it's much more difficult. So they want it separate since they'd only ever pay $500 and need the utilities in their own name. --72.70.xxx.xx
Low Income Duplex (by Sisco [MO]) Posted on: Oct 10, 2020 6:15 AM
Your new acquisition sounds like a boarding house. As such, I would rent by the week( at a higher rate) if I were to include all utilities. Also, if all utilities included is the plan, be sure to operate in such a manner to fall under hotel laws.
Low Income Duplex (by Steve [MA]) Posted on: Oct 10, 2020 6:29 AM
If you do decide to rent them with all utilities included, I suggest that you go all electric & during your renovations, you set things up so the utilities can easy be changed to separate meters.
I have a 5 unit that we pay the gas heating, cooking & HW as well as for all of their electricity. So far it's worked OK but if we ever do a major renovations we'll definitely split things up. --71.174.xxx.xx
Low Income Duplex (by Tarheel T [NC]) Posted on: Oct 10, 2020 10:17 AM
May i ask how much did you get it for? --99.203.xx.x
Low Income Duplex (by Oregon Woodsmoke [ID]) Posted on: Oct 10, 2020 10:56 AM
Have all utilities separated out. You attract tenants with the lower rent. Most tenants, especially lower rent tenants, can't seem to balance out the costs of utilities included but that makes the rent is higher. They will go for the lower rent, not even taking into consideration the cost of utilities.
Also, I've had the occasional low rent tenant who can pinch the bejeebers out of a budget and they can get their utilities low, so they like to pay less rent and to be in charge of what they use.
If utilities are included, they waste, and the cost of power and water will not be going down anytime soon. --76.178.xx.xx
Low Income Duplex (by Oregon Woodsmoke [ID]) Posted on: Oct 10, 2020 10:59 AM
I know that your area is not the same as mine, but if I had 1 bedroom duplexes, I'd fix them up really nice and aim for young middle class kids just getting out on their own for the first time, and I'd go for newly divorced people (usually men) who have to save money but know how to take care of a place. --76.178.xx.xx
Low Income Duplex (by Deanna [TX]) Posted on: Oct 10, 2020 12:08 PM
I had been thinking about rooming-housing it, Sisco, because the parking ordinances are more generous that way (1 parking space for each 2 sleeping rooms, vs 1.5 parking spaces per unit). And the income would be greater, in theory, presuming everyone got along and I was able to keep full.
But I didn't think the layout would be conducive to maximizing the space efficiently for a rooming house. Since one of the bathrooms is a private bath off one bedroom, and the walls it borders are the exterior, the back side of the kitchen counters and another sleeping room-- although perhaps, since I need to tear it all out anyways, I might be able to turn it into a hall bath off the kitchen, by turning the kitchen workspace 90*... that would give me a 4/1, which would be stressful on the plumbing. A 4/2 would be preferable.
Turning it into a 1/1 duplex, I'm sacrificing one bedroom for the living room, and another bedroom for the bathroom.
Low Income Duplex (by 6x6 [TN]) Posted on: Oct 10, 2020 1:12 PM
What did you decide on the utilities? --73.120.xx.xxx
Low Income Duplex (by Deanna [TX]) Posted on: Oct 10, 2020 1:14 PM
Ah. But it will probably take $30-$40k to fix it up, depending on how many redundant systems I have to come up with. (4 hot water heaters, 4 heating/cooling systems, 4 stoves, 4 fridges, 4 breaker boxes, 4 kitchens, 4 baths, plus total replumb and total rewire, paint and flooring, light fixtures, etc, etc, etc.)
It would be a cheaper renovation to do it x3, and rent the alley house by the room rather than duplexing it, but I don't know what my (poor/rural/isolated) market can handle before I get too far away from what my preferred market can wrap their heads around, and start dealing with the grifter-class tenant pool. --137.118.xx.xxx
Low Income Duplex (by Deanna [TX]) Posted on: Oct 10, 2020 1:18 PM
6x6, I think I'm going to go over with a measuring tape tomorrow and see what I have for a floorplan. And in the meantime, I'll get some progress made on the demolition and tear-out and get my canvas blank. That will give me an idea about how to put stuff back together again.
I've got three turnovers that I'm working on getting back on the market to give me the funds that I need for this project, and I'm partway into a 2/1 renovation. So I've got a little time to turn things over in my head and change my mind a few times. :) --137.118.xx.xxx
Low Income Duplex (by 6x6 [TN]) Posted on: Oct 10, 2020 1:23 PM
Thank you Deanna. --73.120.xx.xxx
Low Income Duplex (by plenty [MO]) Posted on: Oct 10, 2020 2:01 PM
My sister turned a small area into a washer and dryer access from an outside door. She includes this laundry privalege as part of the package and she leverages it by rekeying locks lock one out if its abused or rent is not paid. Also consider mini splits for heat and cooling. And i would put in mini kitchens not full size. Maybe consider no oven but a convention microwave and a two burner smooth top cook. Small apartment size refrigerator and no dishwashers. Check out Ikea for small kitchen ideas. --172.58.x.xxx
Low Income Duplex (by Landlord ofthe Flies [TX]) Posted on: Oct 10, 2020 5:17 PM
I've heard from several tenants that they prefer all electric. Guess they equate one less bill to pay with saving money. In the case of not paying taxes/fees which for gas is about $25-30/mo, they'd be right. Also it's one less thing that could start a fire.
And in the winter, electric heat is more expensive, about the cost of HVAC in hottest of summer, but it's a short period.
Also, don't worry about utility costs doubling. Texas produces too much coal, and we are on our own electrical grid so we can muscle through a lot of environmental laws because our grid is state, not national since it doesn't cross state lines. Got to love Texas. --108.69.xxx.xxx
Low Income Duplex (by Robert,OntarioCanada [ON]) Posted on: Oct 11, 2020 5:44 AM
A change in government where they phase out coal completely. In the province of Ontario there are no longer any coal fired power generating stations even though the coal fired power stations had pollution controls. Upgrading insulation where ceilings, walls are spray foamed will reduce heat transfer all year round. Low rent with very high utility costs are difficult to retain tenants no matter what type of rental unit. Natural gas here costs about a third compared to using electricity for heating, hot water, clothes dryers. There are net zero buildings which are very well insulated where there is no need to be connected to the electrical grid. For all electric it is only feasible if a high efficiency split heat pump and heat pump water heaters which do not use electric elements for heating hot water. In the past buildings were poorly insulated where the solution was to put a larger HVAC system which is not viable today. One time the price of oil spiked here where houses in rural locations started to install geothermal HVAC system which was very expensive to install but very economical to operate. In the house starting to DIY spray foam where it is starting to make a impact. Installing vent panels in the rafters which is going to reduce heat transfer all year round. A metal roof during the summer where the house does not get as hot a asphalt shingle roof. Baseboard electric heat is next to impossible to rent here. --147.194.xxx.xx
Low Income Duplex (by Renne [TX]) Posted on: Oct 11, 2020 2:02 PM
Oh, Deanna, how I envy you with this purchase! I read your blog and canít wait to see pictures and hear how youíve transformed them.
Two of our last purchases were fixers and I am completely hooked! Now, I canít seem to drive by an overgrown yard full of trash or dead cars without taking note of the address for further investigation.
We purchased 26 acres with a cute little 3 bed 1 bath farmhouse and spilt it into a duplex with 1 bed and 1 bath each. Although it was a headache to split out the utilities, I am very glad we did as billing the Residents is so much easier.
We removed the propane and went all electric and I am very glad about that too. We have 1 home that still has propane and it keeps slipping our Residentsí mind to check the tank level until one day, no hot water. In our area, the minimum propane refill is 100 gallons and that can be quite a financial shock for our Residents. We are saving to convert that 1 home to all electric.
In our farmhouse remodel, we were able to fit in all the conventional kitchen appliances, albeit apartment sized, including a dishwasher (as I would never, ever, ever rent a home myself without one) and washer and dryer.
I was hesitant to get into the duplex business as we have read so many articles regarding noise disputes between neighbors. We found some products that helped including special sheetrock and caulk of all things. How you position and situate the interior spaces will also help. We were able to replace a window with a door so we have a back and a front unit which allows them so much more privacy than if they were side by side.
We have a 2 bed 2 bath duplex with a bonus office space where water, landscaping, internet and trash is included in the standard rental price. As plenty (MO) shared, it has been tricky to rent as applicants look at the base price which includes all those utilities and think itís too high for a 2 bed 2 bath. Maybe with the current work/school at home situation, it will be easier to rent.
Were you thinking about targeting Section 8 applicants? If so, does rent need to include utilities?
All the best!
Low Income Duplex (by Deanna [TX]) Posted on: Oct 11, 2020 5:53 PM
Yay, Renne! Your setup sounds very exciting! Thank you for the recommendations and experience!
Our town was part of the oil/gas boom back in the day. There were about 300 units' worth of multi-family housing that were built to accommodate the oilfield workers. After oil and gas went bust in the 80's, the City fathers decided to turn all the vacant units of property into government housing. So now we have, like, 300+ units' worth of government housing in a teeny rural town of 3000.
A lot of the people I rent to are people who are trying to get away from government housing. They like the price tag, but they hate the neighbors. :P (They include basic cable and water in the rent; electricity is metered separately, I think.)
I don't try to compete with Housing on price, because I'll never win... I'm that rung on the ladder that's a step up from Housing and the slumlords, and then the next rung above me is home ownership.
At some point, I'd like to get into senior citizens on fixed incomes, but I don't think the alley duplex would appeal to them. So it will probably end up being young singles. A thousand times more drama, and definitely more turnover, but... who knows. :) --137.118.xx.xxx
Low Income Duplex (by Renne [TX]) Posted on: Oct 11, 2020 7:42 PM
What a task you have with all that surplus government housing! Based on your blog, it wonít be long before you have turned that property around!
Be encouraged about young singles. One of our very best Residents is a single young lady and our target Residents are young people who donít have a rental history. Not trying to paint everyone with a broad brush, but for us they have been wonderful Residents. True, it takes a little bit of helping to educate them, but Iím an educator so itís very natural for me.
All the best!
Low Income Duplex (by Ray-N-Pa [PA]) Posted on: Oct 13, 2020 5:02 PM
When I buy a duplex now a days I look for three things
1) Location - you can't change where it is at normally.
2) Lay out - if up and down....it has to be dirt cheap as complaints can be expected
3)Utilities - Are the units individually metered --24.101.xxx.xx
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