The Pros and Cons of Including Utilities in Your Rent Bills

The Pros and Cons of Including Utilities in Your Rent Bills

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One of the recurring debates when it comes to property ownership is whether to include utilities in the overall rental bills or have the tenants pay for them separately. Including utilities has generated a mixed response, with some people seeing advantages, and other people seeing it as a hindrance. Consider some of the following pros and cons of including utilities in your rental bills.

 

Pros of Including Utilities

Including utility costs in your rental bills has some advantages that can benefit your business. Some of these advantages include:

  • Tenant convenience. By including utilities, you entice prospective tenants who desire the convenience of consolidating their bills.
  • Tax deductions. You will enjoy some tax deductions, since utilities are a business expense you use to own and maintain your property.
  • Higher rent. You can charge a slightly higher rent cost to make up for any losses caused by higher utility costs.
  • Because all units are now in the same meter, it is easier to keep track of consumption and payments.

 

Cons of Including Utilities

On the other hand, there are some possible negative consequences to including utilities in the bills, including:

 

  • If the tenant does not pay his or her bills, you are responsible for the tenant’s actions. Even with automatic pay, you still must manage it.
  • Unpredictable rates. Utility rates tend to fluctuate, and you will end up having to pay the rest of the cost.
  • Inaccurate rent cost. By adding utilities to your overall bill, your property seems more expensive than the actual price. This factor can scare potential tenants away.
  • Reduced tenant consequences. Including utilities in the overall bill can discourage tenants to use utilities conservatively. They will think you are covering water, heating, etc., unless you set a specific utility ceiling in the contract.

 

Ultimately, it is up to you to decide whether you can withstand the negative aspects of including utilities to enjoy the positive aspects. At Landlord Thermostats, we give you the option of cutting costs for both parties.