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Most utilities include gas, water, electricity, trash pickup, the internet, cable, and sewer services. Many landlords will cover a few of the utilities, such as garbage if the property is a multi-unit household. For single-family homes, the renters generally cover the costs of utilities. Here are a few different options for handling utilities.
Why landlords decide to build utilities into the rent
Many landlords go this route because it seems like an easy solution for them and their renters. After all, why have a tenant make two payments when both amounts can be combined? Plus, budget-friendly renters might appreciate knowing exactly what their monthly living expenses will be. If the alternative is charging a per-person utility fee, you may be seen as using discriminatory practices against families.
Different ways to charge utilities
Keeping rent and utilities separate has many benefits. Utility costs can fluctuate, so it can be difficult to come up with an amount that will cover your costs for the length of the lease. It can also behoove landlords to have their tenants put the bills in their own name. This can save property managers the headache of having to coordinate another payment with the utility companies. It also lets responsible renters have a chance to shine.
Other things to consider
If you are planning on including utilities in rent, be aware that this will affect how renters find your listing when you’re marketing a vacancy online. If tenants are looking for homes in a certain price range, then including extra costs can bump it up by $200. Be clear about what’s included, and what’s not, in your listing.
It’s a good idea to outline the policy regarding what the tenant will pay and how in the lease. Going over the process will prevent any confusion later on and will ensure that bills are getting paid. If you want to check in on the bills, you can call the utility company and tell them that you are the homeowner. Remember, unpaid bills can reflect negatively on the homeowner since it can put a lien on the property.
We want to know: do you include utilities in your rent?