Video courtesy of Electric Rate

--AAs expected, PEPCO recently published their new residential and small business electric rates in Maryland. The new rate increases will cause many electric bills to rise by over 25% in the coming months. While not quite as drastic as last year’s rate hike in October, the new increases will pose significant challenges to an already beleaguered market. Because Maryland is a deregulated state when it comes to energy, customers there have a choice. They can continue getting their energy supplied by the state public utilities or they choose a competitive supplier such as Constellation, Potomac Edison or Direct Energy. 

--AThere are five Maryland energy companies owning power lines and delivering electricity in the state. Depending on which of them operates in your area, you are charged different electricity rates. If they are your energy provider, you are able to compare their rates against the retail electric suppliers and, when you find a good offer, simply make the switch. Keep in mind, if you are currently locked in a fixed-rate electricity plan, exiting might result in an early termination fee.

Good resource to shop and find a cheaper rate

https://www.electricrate.com/

Link to New Pepco Residential Rate Updated October 1st here

--Following in the District of Columbia’s footsteps, Montgomery County recently enacted a comprehensive rent stabilization law that will limit annual rent increases to 3% plus CPI, with a maximum limit of 6%. Notable exceptions to the law include exemptions to units that have been offered for rent for less than 15 years as well as an exemption to allow a surcharge to fund capital improvements provided the surcharge is limited to an amount necessary to cover the costs of capital improvements and the surcharge does not take effect until after the capital improvements are completed. Needless to say, this has placed additional downward pressure on multifamily owners and has forced some developers to back away from the table on some acquisition opportunities they were chasing.

__The CPI index for urban consumers currently sits at 3.7 and, based on that, it looks like multifamily owners would hit that maximum limit of a 6% increase to rents. Depending on the number of units at a property, this could still represent a significant amount in additional rent they could be charging. And for all those properties that are subsidized and classify as Affordable Housing, sometimes the only way to achieve that 6% increase is through the utility allowance. We just examined the financials for a client on a potential acquisition opportunity and we were still able to find additional Net Rental Revenue in the 5-figures by simply improving on the current utility allowances in place and this is taking into account the 6% cap on rents. Please contact us if you are looking into any acquisition opportunities where rent caps may be in place or any current buildings in service to see if there is any room to improve on your utility allowances. We would be happy to help if we can. 

A link to Montgomery County Bill 15-23 here

Disclaimer: All information provided is deemed reliable, but is not guaranteed and should be independently verified.

On this particular property, we will have saved the owner up to $22,752 in Net Operating Income over the course of the upcoming year.

On this particular property, we will have saved the owner up to $46,576 in Net Operating Income over the course of the upcoming year.

On this particular property, we will have saved the owner up to $44,850 in Net Operating Income over the course of the upcoming year.