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. 

Mark Gallagher, Real Estate Agent in New Jersey (#1221341) and Pennsylvania (#RS314542)

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.

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