Registered: 1464016069 Posts: 16
Reply with quote #1
I am considering including heat (natural gas) in the cost of the rent. In the past I have only included water. For the heat I would be charging $200 more a month. The gas is also used on the stove and the dryer.
I am considering doing this because the way the building is setup, the 2nd floor unit actually has much higher gas bills in the winter than the 1st floor. Just about triple! So it seems that the are paying most of the heat. Anyway, is it weird to pick and choose which utilities are included as part of the rent? I guess I could include electric and charge more. How do you figure out how much to extra to charge if you're including utilities?
Registered: 1472494503 Posts: 431
Reply with quote #2
My concern would be that it will start to look expensive to other places in the area if people don't realize it includes utilities.
Knowing the historical amount would be vital to know how much to charge, since you have that I think you are correct in your plan.
Registered: 1487987694 Posts: 130
Reply with quote #3
I agree with LLinVA.
Make sure your listing is clearly marketed with utilities included. Also, be sure your rent + utilities price is competitive. Estimate what others would pay for a comparable home. Your prospective tenants will be doing this comparison as well so it's best you get a sense of what they will be seeing in the market. Also, understand that including the extra $200 in the rent price will cause some prospective tenants to avoid your unit. If they are searching for a rental with a $2000 max limit and yours is $2200, they may never see it. You might want to consider listing it at $2000 but making it very clear in the listing that the rent is $2200 including the utilities. I am not a fan of this myself but I can see why some landlords do this. __________________ AccidentalRental - A profitable resource for new landlords
Registered: 1169270040 Posts: 3,787
Reply with quote #4
Please be aware that some tenants will take advantage of utilities included. Since they aren't paying for them, they have no incentive to conserve. Charge more than what the average utilities would be or you may find that they may be running a lot higher than you expect. Typically, tenants use more when they are included because they let water continue to run rather than turn it on and off, they open a window rather than change the heat setting, they turn on the air rather than open a window, and I've even seen them run the heat and a.c. on the same day. Wasteful tenants can run utitlities up 40% above a conservative tenant. And a vengeful tenant can let water run 24 hours a day on your dime. You may want to consider some bonus or incentive in the lease for low utility bills to encourage conservation.