Choosing to cover utilities for a tenant

lightbulb2When you list a property for rent you'll need to decide what bills you'll pay for the tenant, if any. In some part of the country it makes sense to pay for certain utilities, such as heat or hot water, but not others. It also may depend on the type of property that you're renting out. Are any of the utilities shared? If they are, are they easily divided up so that you are aware what charge should go to the tenant? There are times that it may even make sense to pay part of the bill. In other words, you may give an allowance that you'll pay up to $50 for electricity, but if the tenant goes past that, they'll cover the rest.

Often the 'bills included' option can be a great perk when advertising your property. As the landlord, if you choose to include a utility as something that you will pay, you can work that average into the rent to help offset the cost.

It is also a good practice that if you're offering to pay various utilities for the tenant that you make sure your property as efficient as possible. This will help cut the costs for you in the end, so it's an investment that you'll certainly want to look into. Energy efficient appliances, lighting, and the sort can help keep the electricity bill down. You may want to schedule a regular maintenance trip to replace the AC filters if you live in a state that requires the AC to be on for extended periods of time throughout the year. If you choose to cover the water bill you'll want to make sure that the toilets installed into the property are set up to use the water efficiently and that there are no leaks from any sinks, showers, or toilets. If there is a yard attached to the property, you may want to look into investing in low-moisture plants and/or making sure that the sprinkler system has a timer attached to it and can't be run on whim.

Check out a great article on BiggerPockets about savings money by conserving water in your properties. You can read more on that here.
POSTED July 09 2014 10:30 AM

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