Author Topic: Landlords: Do you include utilities in rent?  (Read 6315 times)

thedayisbrave

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Landlords: Do you include utilities in rent?
« on: February 26, 2015, 10:14:36 AM »
I've always utilities billed separately, but a friend of mine wanting to buy his own rental property told me he was planning on making his rent all-inclusive and make an extra buck or two on it.  For instance, charge $450 per person even though base rent comes to $350 and average utilities are around $50-$60. 

Just curious what others do...

kib

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Re: Landlords: Do you include utilities in rent?
« Reply #1 on: February 26, 2015, 10:35:35 AM »
I believe in resource conservation.  Renting all inclusive is like giving people a green light to go nuts with resource use.  Some will and some won't, but I've always felt it better to give them a cash incentive by letting them pay their own utilities. 

Downsides: more work for the landlord and no profit from the utilities.

Upside: no risk of underestimating how much electricity and gas mindless people can use.

stickynotes

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Re: Landlords: Do you include utilities in rent?
« Reply #2 on: February 26, 2015, 10:43:31 AM »
It depends. For electricity, absolutely not. Just as the PP said, it just encourages them to be wasteful. But for some things, like water for example, I can't get separate meters for each unit so I include it. I do mark it up. In some ways though, me paying the water bill keeps me watchful for leaks. And if a tenant is doing endless amounts of laundry, that can be part of the conversation when they go to renew their lease. The one thing I never let a tenant pay for is an alarm system. Being locked out of my own property is the last thing I need.

kib

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Re: Landlords: Do you include utilities in rent?
« Reply #3 on: February 26, 2015, 10:49:14 AM »
I do agree with PP - the bills that are small or don't change a lot like the sewer and garbage bill I pay for myself.

thedayisbrave

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Re: Landlords: Do you include utilities in rent?
« Reply #4 on: February 26, 2015, 11:17:52 AM »
That's been kind of my thinking too but when he pointed that out it made me question my strategy.  Water is included in the HOA fee (condo).  There is talk about getting that sub-metered out but nothing concrete has been done so far. 


Bobberth

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Re: Landlords: Do you include utilities in rent?
« Reply #5 on: February 26, 2015, 12:43:40 PM »
With my tenants currently paying for their own electricity and gas, they keep the AC at 60* in the summer and furnace at 85* in the winter.  I would be very careful paying for some one to live this way.  There are some arrangements where you would want to pay for utilities-boarding house etc.  I pay for lienable utilities only-water and sewer here. 

I've never figured out how a tenant will melt if it is warmer than 65* in the summer but then freeze if it's colder than 80* in the winter? 

Stachetastic

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Re: Landlords: Do you include utilities in rent?
« Reply #6 on: February 27, 2015, 09:35:19 AM »
Great question. I have a duplex that I pay the water, sewer, and trash pickup. (The sewer bill get leveraged on property taxes if not paid, so most rentals around here include it.) I also pay the gas bill, because it is a converted single family and only has one furnace. The down side is that one tenant has control of the thermostat for the whole place, and I have no control over how high they set it. I've never had an upstairs tenant complain, though. I suspect they would probably just open a window if they got too hot. I've looked into splitting the HVAC system and making each tenant pay their own, but the ROI was dismal.

Nate R

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Re: Landlords: Do you include utilities in rent?
« Reply #7 on: February 27, 2015, 11:14:36 AM »
My thought is to NOT include them whenever possible.

My SFR, the tenant pays water and sewer as well as gas and electric.
My duplex, tenant pays Gas/Elec, but water isn't split, so I pay that. Usage is such a small portion of the bill it isn't a big deal, so far.

Dividend Youngster

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Re: Landlords: Do you include utilities in rent?
« Reply #8 on: February 28, 2015, 07:06:28 PM »
I have a triplex tenants pay gas + elec I pay sewer and water... I wouldnt include, for the amount of money youre trying to make you are going to increase the amount of work you do and you might not even come ahead on it... let them pay it

Dimitri

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Re: Landlords: Do you include utilities in rent?
« Reply #9 on: February 28, 2015, 09:33:53 PM »
I rent out a condo.  Tenant pays for all utilities excepting water/sewer for which I receive an annual bill in the fall.  If I charged all inclusive I might just get an unpleasant surprise in the mail one month.  And I don't like surprises.

LiveLean

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Re: Landlords: Do you include utilities in rent?
« Reply #10 on: March 02, 2015, 06:59:42 AM »
I have a weekly beach cottage rental where the owners must pick up all utilities.

Apparently some owners (not us) have installed those Internet-enabled thermostats where you can control the temperature remotely. So when they see the thermostat set to 62 in August, they pump it back up to 70. Obviously this causes some issues and is not recommended by the management company. But it is food for thought...

thedayisbrave

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Re: Landlords: Do you include utilities in rent?
« Reply #11 on: March 02, 2015, 09:43:12 AM »
I have a weekly beach cottage rental where the owners must pick up all utilities.

Apparently some owners (not us) have installed those Internet-enabled thermostats where you can control the temperature remotely. So when they see the thermostat set to 62 in August, they pump it back up to 70. Obviously this causes some issues and is not recommended by the management company. But it is food for thought...

Are you talking about Nest? The digital thermostat now owned by Google?

I think of this unit in particular as an 'economy' style rental... no upgrades, but college kids don't care because it saves them money and it's close to school.  So I do enough to maintain the unit in decent condition, but no fancy schmancy thermostats ;)

mtn

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Re: Landlords: Do you include utilities in rent?
« Reply #12 on: March 06, 2015, 08:57:56 AM »
If I were to rent a place out, this is what I would do:

I would include utilities in the rent for about double what the average utility bill is, AND I would have written into the lease that anything over 15% more than the normal utilities for that month will be charged to the tennant (security deposit). You'd have to get the average useage (not cost) for everything for the past 12 months. Add it all together and put that in the lease that anything over XX in useage will fall to the tentant to pay the difference.

So lets say that from January to June, you use 100 gallons of water a month. July to September, you only use 50 a month. And October to December you use 200 gallons a month. I'd then put it in the lease that either they're allowed 1,350 gallons a year, and anything over that they have to pay. Or do it month to month, and give them a limit of 112.5 gallons.

We had this happen at a place in college (the annual limits). We knew we were paying a lot more than we were using, but it was just easier than to split 4 bills among 4, and then 3, people (Apartment was still best deal we could find at the time). We would have come in WAY underneath their limits if it weren't for a subleasor we had over the summer that would do a load of laundry consisting of 2-4 articles of clothing probably 4 times a week. But we were also watching our utilities, since we knew we could indeed go over.