Utility Payments: What Are Included & Who Should Pay - What to Know
When it comes to managing rental properties, you are faced with the decision on how to handle the utilities. For the most part, it’s best to hire and leave it to your property manager to decide. Even so, it also helps to understand what is included in the utilities and how to manage them. There are factors to consider as to who should pay for the utilities: you as the landlord or your tenants? Keep on reading to find out for your guide and reference.
What to know about rental utilities
Rental utilities are useful features of rental properties, which make your properties truly habitable for the benefit of your tenants. But apart from comfort and convenience, you are required by law to provide your tenants access to basic utilities. For your reference, below are rental property utilities included:
Water and sewer
Internet, cable, and telephone
Security or alarm system
What to consider when deciding who will pay for utilities
Now, you may wonder why it’s crucial to decide who pays for the utilities. Know that your decision as to who will pay can impact your rent price, the bills you’re paying, and the profit you can make. That said, here are three factors to consider:
1. Rental cost
You have to consider how much the rental cost of your properties is. More often than not, the total rental price includes parking and laundry. Now, if the utilities have to be paid by the tenants themselves, then you have to maintain the rental cost as is. If you plan to include the utilities in the total rental cost, then you have to raise the rent price to reflect the value-added features.
2. Rental interest
During rental marketing and tenant screening, the interest in your rental properties can greatly influence your decision. If you have the utilities included in your total rental price, this might come across as too expensive. Unless you clearly explain to the prospect renters what’s included, then these prospects won’t back out. On the flip side, a lower rental price may appeal to potential tenants, but you have to explain that it is their responsibility to pay for the utilities.
3. Rental control
There are instances as well when landlords prefer to have full control of their properties. So taking the route of paying for the utilities as well can give you such control. On the other hand, some tenants want to have control over their bills, so taking the other route is a viable option too. That said, you have to sit down, weigh in both options, and decide on what works best for your rental properties.
At this point, you now understand what rental utilities include. You also have a better idea of what factors to consider when deciding to pay for the utilities or leaving them to your tenants.
What better way to proceed than to hire a property manager to deal with your rental properties? These include deciding on whether to pay for the utilities or leave them to your tenants. As there are pros and cons to each option, your hired property manager will help you arrive at the best decision.
Contact True Management in New York City today and get our innovative property management solutions!