Hello Mustachians. I'm mulling a move and downsize and would love your thoughts.
I've got a house with a basement apartment. The entire thing is currently rented out, but will be available to me and my young child next spring.
Upstairs: 4 bedrooms, 2 bathrooms, kitchen, dining area, living area.
Basement apartment: 1 bedroom, 1 bathroom, kitchen/dining area, living area, walk-in closet/dressing area. The basement apartment has its own entrance and free parking.
There is one set of laundry machines, and we each have access from our own parts of the house.
I have rented out the apartment in the past while living in the larger upstairs part of the house. I charge a flat rent, and pay all the utilities. This is the convention in my area. This includes water, gas (heat, dryer), electricity, wifi and one cable TV hookup. The basement resident has NO control over the heat or central A/C - it's all controlled upstairs where the thermostat is. This has not been a problem in the past. I figure the tenant usually costs me about $150-$200/month in utilities. Market rent now is about $1,200, if I include all the utilities and laundry privileges, so let's say I'd net about $1,000/month for the basement.
My idea is to flip this scenario when the house is available and have my kid and I in the basement and rent out the top 2 floors - which would garner much more rent. I'm not sure HOW much more - but let's say at least $1600/month, not including utilities.
My question is: How would I split up the utilities if I'm in the basement? I'm not into paying for their usage. Plus, I really like fixed bills/dislike fluctuations in bills. I'm pretty conservative with water, power, etc., and would have no control over heat and a/c.
Would I pay for everyone's TV and Internet and part of the water, and let them pay for the gas and power? Divvy it all up somehow - 33%/66%? Depending upon how many people they have up there?
This really has me stumped as to how to be fair, not seem seedy or greedy, and not get jammed up with someone else's bills who may not be as careful as I am with power/water/etc. I cannot meter these places separately.
I work from home a few days a week and need internet and cable TV news for work (don't ask.) If by some miracle they didn't want this, I'd of course pay it all and have just one TV on the cheapo plan. But water/power/gas - this is not optional. And water ain't cheap. The more you use, where I live, the more you pay. Opposite of the economies of scale.
Any ideas?
If it helps, my current monthly nut on the place is $2,200, including taxes and insurance and principal. I'm mid-refi now, and that would bring it down to $1935/month if it goes through. My current tenants, who have the entire house, pay $2,150, so I'm subsidizing them $50/month before tax write-offs.
Thanks to any brainpower that goes into this.
-MrsKensington