How to split heat and hot water amongst tenants?

[Darrick Lowe]

I'm used to multifamilies where each unit has its own water heater and furnace.  But what If there is a home with only 1 water heater and 1 boiler in a multifamily home, how exactly would one split the bill almost tenants? Metering each unit costs too much money. Could I have bills sent to me, and then every month send each tenant a text message telling them how much to add to their monthly rent? Or perhaps have them pay an extra $50 a month, and then credit them if they overpaid at the end of the year? Or is there a more efficient method to do this? I'd love to hear if you have any pro tips.

[Nathan Gesner]

You could split the bill each month and pass it on to the tenants but that's just one more thing to deal with. I prefer including those utilities in the rent.

Let's say you have a four-plex on a shared furnace. The cost to heat the property runs $1,200 a year. Divide that by four and each tenant is responsible for $300 a year or $50 a month. I recommend increasing it 10 - 15% because people have a tendency to squander utilities when they don't see the bill each month. In this case, I would increase the tenant's rent $55 a month to cover the heat costs. Instead of $700 a month rent, they would now pay $755 with heat included.