Getting tenants to pay the water bill

18 Replies

@BrandonTurner... I was just listening to podcast122 w @ChrisClothier and you guys were talking about pros and cons regarding evicting someone for not paying the water bill. I was wondering... Why not just advertise your rentals "water included"? We have the same regulations in my area and we will tack on $60 to the monthly rent and advertise water/sewer/gas included. Is this against the rules?
Anyway loved the show as usual.

Sometimes tenants only look at the price and not at the amenities first.  So if their budget is $800 for example for rent, and yours is priced at $860 because it includes water, they may not find your rental if they search by price.

Secondly, if you include say $60 of water per month, and the water bill comes in at $100 per month, then are you on the hook for the other $40?  If not, then there has to be a policy on how to handle that. Essentially the tenant is paying for the whole water bill then.

In philly the water is billed to the owner. I pass that to tenants in my SFHs but I factor it into the rent for my duplexes like you suggested. Sometimes I lose a few dollars of they use a lot of water. But that just makes me so water saving upgrades and/or adjust their rent at renewal time. Works out just fine.

I include water too. I used to have the city calling me to collect water. Not anymore. Only a few months out of the year the water bill is higher and that is when they are watering the yard, keeping my rental unit looking nice. I don't mind so much.

It is always less headache to let the tenant pay for the utilities directly whenever possible. Sometimes you can make a small amount for handling the utilities, but in my opinion it is not worth the time.

I always advertise rent for a certain amount, and add "no utilities included"

I agree with the landlords who bill it in the rent, as @Garth Gissel said, only once or twice a year you end up paying a bit more cash, but nothing out of the ordinary yet..

@Brandon Turner , earlier tagging didn't work.

My city does not yet have the same rules as Hoquiam, but they do chase and squeeze me as owner, and extend quite a few months to deadbeat tenants, so I prefer it to stay in my name.

I advertise the unit with the price before WSG and add a sentence: Tenant pays all utilities. PUD account is in tenant name. Choice to add WSG to rent for $135/month or increase deposit by $300.00 to have account in tenant name.

We have tenants who use a lot of water (on hot water heater draining showers and laundry for all their friends, not watering lawns) and some that use very little.  If people are low users, we refund the extra each year.  If they are high, after the third month we give 30 days to raise rent.

I wish our water was $60!  But maybe that is just water, and ours is trash too.

Interesting perspectives. I just heard about certain cities in my area not opening new water/sewer accounts for tenants and I came here to read it up. Great information

Originally posted by @Andrea Bailey :

@BrandonTurner... I was just listening to podcast122 w @ChrisClothier and you guys were talking about pros and cons regarding evicting someone for not paying the water bill. I was wondering... Why not just advertise your rentals "water included"? We have the same regulations in my area and we will tack on $60 to the monthly rent and advertise water/sewer/gas included. Is this against the rules?
Anyway loved the show as usual.

Hello Andrea,

The way you handle it is perfect! That is exactly how we do it. We add an extra payment (depending on location and number of tenants) to the rent and tell the tenants they owe it all in full every month. We almost never talk about the base rent amount. Of course that number is in the lease, but we always refer to the total (rent+water.)

We keep it in our name and the tenants pay us directly. We reconcile it depending on usage of course. If someone pays us just RENT and not water, we inform them they did not pay full rent and we won't accept it.

You have plenty of options out there. I think the way you do it already sounds great. Keep it up!

Tom Ott, Real Estate Agent in OH (#2016003865)
440-749-4043

Thank You @TomOtt ... including water in the rent has worked great. I'm with @UreilSanchez and @GarthGissel. A little extra once per year is ok if the tenants are keeping the property nice. 

All of our friends know we are RE investors and always  ask how it's going. "We are so lucky" I find myself saying.  Our tenants have been near-perfect and our experience has been so positive. It isn't luck though. I really should stop saying that.  Using the strategies I've learned from BP and the podcasts is our 'unfair advantage' for sure. ❤️😊Andrea

Originally posted by @Andrea Bailey :

Thank You @TomOtt ... including water in the rent has worked great. I'm with @UreilSanchez and @GarthGissel. A little extra once per year is ok if the tenants are keeping the property nice. 

All of our friends know we are RE investors and always  ask how it's going. "We are so lucky" I find myself saying.  Our tenants have been near-perfect and our experience has been so positive. It isn't luck though. I really should stop saying that.  Using the strategies I've learned from BP and the podcasts is our 'unfair advantage' for sure. ❤️😊Andrea

That's amazing! I wish you the best of luck in the world of REI. Keep up the good work. It sounds like you really know your stuff. If you need anything else, please feel free to ask me!

Tom Ott, Real Estate Agent in OH (#2016003865)
440-749-4043

I only buy places that are already set up or can be set up easy for individual metering of everything, and tenant pays everything. Human nature being what it is, that which is not paid for tends to be wasted (sometimes even that which is paid for is wasted!), and utility bills will be lower for everyone if the tenant pays the bill directly. 

HI all!

My tenant in Kansas city has agreed to pay the ater bill, its a family of 3, I did pay the firsy couple of months and bill was 200$$ is this normal? I am a Candian and I was shocked to see the cost of water.. Its common practice from what I hear that the landlord pays water bill,I assume I was lucky..how do I convince my future tenants? 

Many people suggested that the tenants pay the water bill directly.

Of course everyone would do that if that were an option. In some areas some bills must be in the owner's name only.

One town I invest in, water bill can be put in tenant's name, but owner gets the bill if they don't pay.

In my area owner's must have the sewer Bill in thier name: Not possible to get it in tenant's name even for sfh.

Issue with me getting them to pay it is that takes work.

The issue with factoring it into the rent price is a $750/month house where tenant pays $50/month water bill is cheaper to a tenant searching for housing than an $800/month house.

I have big problem with this. Quite often tenant(s) are moving up from a duplex to a small SFH. They never paid the water bill before. When we sign the lease I discuss this in detail and show them in the lease where this is stated. Days latter they never called the water company to change the name on the account. I end up chasing them 2-3 times. I sense resistance. When the bill comes to them they don't pay it. Now a shutoff notice is issued from the water company. I must chase the tenant once again. I often wondered if I could write language in my lease to make this issue go away.

As @Michael Herr points out, each water authority has its own approach.  Most (but perhaps not all) water boards who require the account to be in the owner's name do allow sending the bill to "occupant" at the service address.  

For MF's with meters serving more than 1 unit, if water is costly in your area, submetering (to accurately pro-rate bill) or adding meters may be worth it.  In some areas it takes a huge amount paper of effort to add meters so each unit has its own; other areas it's pretty easy...although in many cases the cost to split service (depending on how inter-related the plumbing is) may be too high to justify doing it.

@Jeff Gates , if someone is going to not pay a bill, there is little you can put in the lease to change that - more about screening IMO.  But a few ideas anyway - take a 'water account deposit' that you may choose to waive if someone shows proof of paying water bill on time in the past.  Put it in the lease that unpaid water bills may be deemed "added rent" and that not paying the bill/receiving shutoff notice/etc is default of lease and grounds for eviction.  Have a "water not included in base rent" disclosure that prospective tenants sign...not an attorney/not legal advice/check local law and regulation...

on my lease, I have an addendum that says - "deposit will be distributed in the following manner - unpaid rent, utilities, etc.

I also always collect a little more than 1 month's rent.  like $200-$300 over the one month so the tenant has some skin in the game.

I also collect late fees; it's amazing some people pay me the $75 late fee yet don't pay the $75 water bill; if they'd pay on time, they'd have $ for the water. :)

This is often an issue for us when problem tenants move out. All utils are in the tenants name but the Water Company is the only one that holds the LL responsible for payment.  We can't put the water in the name of the new tenant before the old tenant's final bill is cleared.

We just got whacked with a $450 water bill when one of our tenants broke their lease early. The security deposit wasn't sufficient to cover the water bill and the carnage that they left behind.

Generally we require departing tenants to prove that their final water bill has been paid or we pay it and deduct it from the security deposit. This works out 50% of the time but we get hit the other 50%. 

Rick

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