For all those out there, do you give your tenants an allowance? You know like utilities, water, gas, things like that. What are the pros and cons of an allowance?
My tenant pay their own utilities! The only thing rent covers is rent ;)
Allowance? Nope, never, nada ...
I forgot to add "the 1st $xx.xx the above listed"
An allowance is something you give your children, not your tenants (even though your adult tenants might behave childishly at times ) ...
So best thing is to have tenants get utilities into their own name. Unfortunately, in some areas there are municipal utilities where the municipality prohibits the utilities from being in a tenant's name; when that is the case, you build a projected amount into the rent (so that the tenant is in a way paying it) and you can then state that tenant is responsible for paying landlord any billed amount in excess of the "allowance" amount you built into the rent. You pay the utility company, but the tenant did have to pay you too.
I would suggest to make them put the utilities under their own name (if possible), because even if you put it as included in the rent, unless you charge a good amount, they will abuse it (turn the heater that extra temperature, take those extra 5 minutes in the shower, etc.). I talk from personal investment and renting experience ;)
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