BiggerPockets

I am in my first year of real estate and have wholesaled 1 property & recently finished a fix & flip project that is scheduled to close next week. I recently bought half a duplex and am considering keeping this one and renting. I am new to the rental market and am learning a lot by following the forums. One question I have is who typically pays for the utilities?

It will depend a little on your market, but it is common for tenant to pay their own utilities. Look at some ads for rental in your area on craigslist and see what they say about utilities. It is in the landlord's best interest to have tenants pay utilities directly. Check your local laws and utility policies to see if any are required to stay in owners name and see if any can put a lien on the property if tenants don't pay.

All my tenants pay their own utilities with the exception of one rental condo where water and trash are included in the HOA fees.

Chris,

I have the same problem with 2 plexes. I recently read that it is important to have tenants be responsible for utilities. I am thinking of reducing the rent on one unit and turning over the bill to them. I would then increase the others rent with any increase in rate charges, or something along those lines.

Water in my area is projected to skyrocket so something needs to be done.

Chris,

Have you considered splitting it 3 ways? Youpay 1/3 and the 2 tenants pay 1/3.

Breaking it up 3 ways should reduce the amount paid by yourself and at the same time is more then fair for two tenants as each tenant will only be paying 1/3.

I have done this in the past with gas (heat bills) I have since seperated the heat so each tenant pays their own. I still pay the cold water in all my buildings. The average bill I have gotten in my fourplex is around 100 bucks which is reasonable.

regards,
chris

Tenant pays all utilities, but I will pay the water and trash bill if needed because that stays with the house if not paid. I agree with Kyle see what others are doing in your local area.

Whenever possible, the tenant should pay. Some buildings have one central boiler/furnace for the heat and hot water and those have to have the heat included.

If someone has to have the utilities included it frequently means they owe the utility company a lot of money and if you rent to them they will soon owe you a lot of money.

People also will be wasteful with utilities they don't pay for. They crank the heat or AC with the windows open and leave it on when they are not there.

My area has a lot of duplexes with heat included and separate electric. On a lot of the ones I manage we have blocked off the vents to one unit and put in electric baseboard heat with individual thermostats for each room so that both units can pay their own heat.

Thanks for the the input. Hearing from active landlords is very valuable. If the tenant pays the utilities is the utility bill sent directly to them in their name? If so, how would this affect me if they quit paying the bill?

Here you simply put a landlord agreement in place with the utilities. Any time the utilities would be shut off (tenant moving out or nonpayment) the utilities automatically revert to your name instead of being turned off.

If they are still in the unit and haven't paid their utilities, you'd post a remedy or quit (or whatever the form is called) and essentially treat it as an eviction. They have 3 days to get the utilities turned back over to them or you start the process of having them removed for violating their lease.