The Pros & Cons of Including Utilities in the Rent

landlord utilities included in rent

The Pros & Cons of Including Utilities in the Rent

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When it comes to renting out your investment properties, one of the first factors you’ll need to consider is whether or not you’ll be including the utilities in the rent. If you choose to do so, it’s important to think critically about which utilities you’ll be providing, and which will be up to the renter to manage. As you get closer to marketing your vacancy and finding the right tenants for you, consider these factors when developing your lease.

Whether or not you add the utilities to the rent can depend on a few key factors:

1

Is your building/property separately metered?

Some older buildings and mother-in-law suites are not separately metered, and adding a meter can be a pricey expense. In this case, it might be easier to combine key utilities like water and trash with the rent. If your building is separately metered, taking on the task to bill certain utilities yourself can seem like an unnecessary hassle.

2

How involved do you want to be with your rental property?

Regardless of if you pay for water or internet, when you take on the utilities, you become the middle-man between your renters and the utility provider. This can mean phone calls, notices, and lots of ink and paper. While including some utilities is pretty common, keep in mind that you’ll also need to be aware of your utility provider’s billing (alongside billing your renters).

3

What’s your budget?

While providing internet or gas is a great marketing tool to reel in more renters, it can also bite you in the butt if the utilities you provide are not a set cost. For example, your renters might use more gas in the winter, meaning a higher utility bill. If you’re including utilities with the rent, be sure to figure out how much you should add to your baseline rent to off-set these seasonal costs.

If you decide to include some utilities with the rent after looking at these three factors, it’s time to figure out what utilities you’re willing to offer.

Common Utilities

Utilities like water and trash are commonly offered by landlords to encourage the renters to keep the property clean and tidy. For example, if you want to maintain your property’s curb appeal, offering to pay for water can save your landscaping from penny-pinching renters. Offering to pay for trash encourages your renters to keep your property clean and tidy (trash can attract bugs, after all). Depending on where your property is located, you might also offer gas.

Special Utilities

While you might not think to offer any additional utilities other than some of the more common ones, providing special utilities like internet, tv or electricity, can attract more rental applicants to your property. It can also become a huge hassle to separately bill these utilities if you’re renting out a room or a mother-in-law suite that already has an account with a provider.

If you choose to provide some utilities with the rent, keep in mind that some renters might not be as conservative of utility resources as you are. You might get a renter who loves taking showers and frequently produces a high water bill or someone who uses the A/C constantly and racks up a big electricity bill. In addition to keeping seasonal and regional factors in your utility pricing, you might also want to prepare yourself for a more utility frivolous renter. As long as you have your pricing down from the get-go and take some of these factors into consideration, you can safely and confidently rent your property.

When it comes to renting out your investment properties, one of the first factors you’ll need to consider is whether or not you’ll be including the utilities in the rent. If you choose to do so, it’s important to think critically about which utilities you’ll be providing, and which will be up to the renter to manage. As you get closer to marketing your vacancy and finding the right tenants for you, consider these factors when developing your lease.

Whether or not you add the utilities to the rent can depend on a few key factors:

1

Is your building/property separately metered?

Some older buildings and mother-in-law suites are not separately metered, and adding a meter can be a pricey expense. In this case, it might be easier to combine key utilities like water and trash with the rent. If your building is separately metered, taking on the task to bill certain utilities yourself can seem like an unnecessary hassle.

2

How involved do you want to be with your rental property?

Regardless of if you pay for water or internet, when you take on the utilities, you become the middle-man between your renters and the utility provider. This can mean phone calls, notices, and lots of ink and paper. While including some utilities is pretty common, keep in mind that you’ll also need to be aware of your utility provider’s billing (alongside billing your renters).

3

What’s your budget?

While providing internet or gas is a great marketing tool to reel in more renters, it can also bite you in the butt if the utilities you provide are not a set cost. For example, your renters might use more gas in the winter, meaning a higher utility bill. If you’re including utilities with the rent, be sure to figure out how much you should add to your baseline rent to off-set these seasonal costs.

If you decide to include some utilities with the rent after looking at these three factors, it’s time to figure out what utilities you’re willing to offer.

Common Utilities

Utilities like water and trash are commonly offered by landlords to encourage the renters to keep the property clean and tidy. For example, if you want to maintain your property’s curb appeal, offering to pay for water can save your landscaping from penny-pinching renters. Offering to pay for trash encourages your renters to keep your property clean and tidy (trash can attract bugs, after all). Depending on where your property is located, you might also offer gas.

Special Utilities

While you might not think to offer any additional utilities other than some of the more common ones, providing special utilities like internet, tv or electricity, can attract more rental applicants to your property. It can also become a huge hassle to separately bill these utilities if you’re renting out a room or a mother-in-law suite that already has an account with a provider.

If you choose to provide some utilities with the rent, keep in mind that some renters might not be as conservative of utility resources as you are. You might get a renter who loves taking showers and frequently produces a high water bill or someone who uses the A/C constantly and racks up a big electricity bill. In addition to keeping seasonal and regional factors in your utility pricing, you might also want to prepare yourself for a more utility frivolous renter. As long as you have your pricing down from the get-go and take some of these factors into consideration, you can safely and confidently rent your property.

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The nation’s most trusted tenant screening for real estate agents, landlords, and property managers. No cost background checks available 24/7.

©2018 ApplyConnect. All rights reserved

ApplyConnect marks used herein are trademarks or registered trademarks of applyconnect.com. Other product and company names mentioned herein are the property of their respective owners.