#BILLS TO PAY WHEN RENTING A HOUSE PROFESSIONAL#

While it may seem like a no-brainer to include a monthly utilities fee as part of the rent you charge, there are several variables that make this difficult. What is your tolerance for risk on your investment?

#BILLS TO PAY WHEN RENTING A HOUSE PROFESSIONAL#

Also check with local authorities and a legal professional to ensure that any solution you come up with is in line with local and state regulations. Regardless of the solution, make sure you know exactly how you account for monthly utility costs, because a good tenant will want to know. On newer properties, you can typically have a sub meter installed. It may be cost prohibitive to have the meters split, so you’ll need a way to fairly account for utilities used and a monthly fee to recoup your costs. Often an older home that was converted into multiple rental units has one meter for the entire property. How your property is metered will determine how you charge for utilities. The type of property mattersĭo you own an older home that was converted into a three flat or did you recently purchase a new construction duplex as an investment? The type of property matters because when it comes to utilities, meters matter. Tip: You can now collect rent and one-time payments online with Zillow Rental Manager. This way there is no confusion if someone is late on a payment or skips out on a bill. The most important thing to remember is however you decide to have utilities paid, make sure it’s in the lease agreement that the tenant signs. You want to be confident that the cost is completely covered so your investment can command the best ROI possible. Many times landlords will use a combination of methods, especially with utility services such as sewage and garbage pickup, or if there is a utility that you can’t easily put in a tenants name.Įach of these options has its own set of pros and cons. Tenants put the utilities in their name and are responsible for payments directly. Make the tenants responsible for utilities. Again, make sure to work with a legal professional to confirm the fee you charge is in accordance with local and state laws.

The monthly fee can be flat or fluctuate, depending on what is written into your lease agreement. However, it’s up to you to manage the additional billing and bookkeeping. Again, this keeps utilities in your name, giving you control of your property. You should work with a local legal professional and your local building inspector’s office to make sure the fee you charge for what utilities is permissible in your area.Ĭharge a monthly utility fee.

Some very qualified renters may never even see your property because it will be filtered out of their search. When renters search, they search with a price in mind. In addition, your monthly rent will appear higher than other comparable properties, since your utilities are included in the price. This gives you ultimate control of the utilities, but you’ll need to do a lot of research to determine exactly how much you should add to the rent each month. This is typically a flat fee per month, and you keep the utilities in your name. Three ways to handle utilities at your rental There are three ways to handle utilities payments at your investment property and a number of considerations to take into account to ensure the greatest return on your investment. However, as a landlord, how do you make sure the utilities on your investment property don’t cut into your bottom line? Anyone who has ever paid for housing knows that utilities can add a significant expense to your monthly budget.

Bills to pay when renting a house