Paying heating costs for your tenants because you have an oil burning furnace?

4 Replies

Hey Everyone,

I came across a cash flowing multi after getting all the numbers from the seller. 

The seller currently pays for water, and heat, but charges pretty solid rents of $1200, $1050, and 950. for the area.

 Heating costs every month are around $700 per month.

My only concern is the fluctuating costs of oil.

Any thoughts?

I have a couple multis where I pay the heat up in MA. Its not ideal but its how it was when I bought them. Buying 6 boilers and separating is not financially viable right now. I just monitor the oil bills and keep an eye out for open windows in the spring and window A/Cs in the fall. It just requires a little babysitting. Increased rents cover the oil bills. 

@Brian Fernandes

I've found that paying utilities for tenants can be beneficial as long as you have their respect and they will not abuse it. 

If your cost is $100/unit/month, tenant would rather pay $150/month to you rather than put the utilities in their own name. As @Rob Beland said you can usually cover your costs and then som. 

I have a friend who bought a condo a few years ago and all his bills are included in the condo fee. Apparently it was a former apartment complex built during the 60's heyday of "all bills paid" apartments. Imagine paying the electric bill for 29 condos during a Houston summer. His condo fee is pretty high, though, at $700 a month.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.