Tenants unhappy about electric bill need advice please

26 Replies

I own a 2 family unit in st louis, this is upper level and lower level.  I used to occupy the upper level while the lower level was being gut rehabbed.  While living upstairs i had high electric bills winter only (all elec apts) like 300$ avg in winter time when running heat at about 65ish.

I have a feeling the furnace size is pushing it, not incredibly small and not oversized for the unit about 1100 square feet. 

I think when the furnace is on bills skyrocket, so im thinking the size (possibly) though it does not seem small, and the duct layout have a lot to do with it as it is a 1925 all brick home, with new windows.  

Recently (last week)  i added door sweeps, weather strips to all exterior doors and door sweeps to all interior doors which needed them, bought them plastic to install over (new) windows. and have scheduled to get the furnace cleaned professionally

The market rate of the apartment is 875 and i  am renting it to them for 800 should i be concerned that they are upset about high electric bills,  given i have done more than a slum lord to ensure they are happy and they are 75 dollars under market rat?  Only thing they par is their own electric and rent, i pay trash sewer water

I understand it sucks for a higher than average utility bill and i had to deal with it when i lived up there, i had the same high bills.  However i am doing more than avg for a LL and they got a good deal on the apt.

This is my first time renting only 3 months in i want to ensure that i am doing the best i can but also want to ensure that i am not over stressed for no reason.

Please let me know your thought, i can elaborate and give more details if needed.

Sorry for the unorganized post as this was stream of consciousness writing.

Hi Mathuw!

I have the same issue only with a gas heater. The bills are rather high due to the high ceilings, older furnace, window drafts, etc. These are all typical issues with homes in St. Louis build around the turn of the century. You are doing them a great service by cutting their rent and making the upgrades that you mentioned. Unfortunately, many tenants don't seem to care one whit about anything extra that you do for them.

If you want to pursue it, you can call in an HVAC professional to analysis the furnace and do a heat loss check to show where you are losing heat and may need additional insulation.

Thank you very much for the response Lee.  

I feel that i am doing all i can short of replacing the furnace, this is less than 5 years old and was installed a few years before i purchased the building, i am concerned becuase i dont kow who installed the furnace and how good of a job they did while doing so, also they used all of the old vents which compared to todays standards are not located in the best locations.

I have gone in to the basement and taped every crease or possible air leakage with foil tape, i am doing the best i can.  I am wondering if i am doing enough/ stressing over something i should not be.  Or if a different land lord would go the extra mile and/or do something extra.

If your below market then tell them to look for another place. Once they realize they are paying below market rents, they will shut up.

I am in central valley California. My tenants always get upset their first summer out here. It gets to be 117 degree what do you expect lol! I warn people and than honestly after that its their problem and part of life! I am not about to install new ac units, just because. That's where I go sorry but welcome to life ;0 Of course, much nicer ;)

Thanks elizabeth, i assume it is the opposite here

once winter hits and they use the heat their bill skyrockets.

though stl gets bad summer too, they started renting just after the bad summer months.

I assume they know that the place is below market rent because they said their cap was 800$ per month and they looked at 4 units and decided on mine.  I have not physically showed them my appraisal (which I have)  or told them.  IS this something that should be done?

I have tenants that complained about the electric bill .  I went in the house it was 80 degrees , she said she cant be cold .  Well its winter , you pay for heat , or you buy a sweater .  They asked about lowering the rent in the winter , I told them its better to lower the thermostat 

Mathuw,

I would not worry to much about it. We have some 900 sqft units with 8' ceilings, new windows and have seen bills in the $200s. The simple truth is it is not cheap to heat. If the current system is only 5 years old I would say that is probably not the issue though having an HVAC person come out and look at is not a bad idea. You can have them service (clean) it while they are there. The other thing is make sure the filter is getting changed. 

You have gone above and beyond here. The only other thing you could do is recommend they go on budget billing. This allows them to pay a fixed rate that gets adjusted every six months based on usage. In order to do this they will just need to contact the utility company. 

@Mathuw Chandler    I would suggest getting an "Energy Audit".  Call your electric company and ask them about it.  Basically all of them offer them or can tell you who to contact to do one.  If the electric company does the audit, it should be free or very inexpensive.

Things like a bad hot water heater can really add to the bills.

The same thing happens when people move to Texas.  We often get people that move from 1000 square foot house into a 5000 - 6000 square foot house.   The stroke normally happens when they get their first summer electric bill.

Twenty five foot ceilings seem like a great idea until the chimney effect turns the up stairs into an oven without $1000 in electric bills.

If you're new at landlording, you will soon figure out that tenants in St. Louis will freeze if it's less than 80* during the winter and will melt if it's warmer than 65* in the summer. I have no idea what would happen to them if they were ever to encounter those 15* in the middle.

A tenant emailed me last week saying that the thermostat was set at 79* but it was only 72* by another thermometer. I was tempted to respond "You're welcome" but decided against it. I went and changed the filter and she was much better. Same thing, 1920s brick building with old windows. I don't know why they want it so warm? 

If they don't like the electric bill, ask them how much their gas bills used to be during the winter. Lots of tenants prefer all electric units to avoid the gas bills (or have unpaid gas bills they are running from). I prefer all electric too as I can have heat during the winter and tenants are less likely to go without electricity than they are having the gas shut off.

Florida as well. Cool set to mid 60s, heat set to 80. And they wonder why they have a $300 bill at the end of the month. Exactly same thing. Some even hide under blankets because it's so cold from the AC! Just turn the AC off dumbasses.

We've had complaints in the past, mainly in the summer, so you wander over to check the house and find it as cold, if not colder than the refrigerator. My money tip suggestions in the past range from: 

"turn your refrigerator off as you obviously don't need it as its so cold in here"

"Why is your window open?"

"Why are you running a tv cable through an open window?"

"You're not getting $400 bills, that's the amount you haven't paid in the last three months, this is a statement" (not to worry, she was a technition at the local hospital, not a job that ever requires maths. Or brains.)

Or one of our latest complaints:

"You know the central AC system in the house cools better then 3 window units? And is cheaper to run" The tenant had gone out and bought a bunch of window units under the illusion they are cheaper to run. One isn't, let alone three.

I did scratch my head at the couple using the electric oven to keep warm rather than the central air heat. By god though, that oven kept them nice and toasty. We soon put a stop to that.

I remodel home exteriors for a living. What kind of siding and Windows do you have on the building? I would say it's not the furnace that's the problem, it's the air infiltration and insulation.

Mathuw just some thoughts here. It's interesting your tenants are complaining to you about the the electric rates of their energy use. Furthermore prior to renting from you they could have called the PUD and asked what the energy usage was at that addresses. It sounds to me like you have done everything within reason, but if you want to take it a step further you could look at having a ductless heat pump installed. They are highly efficient and if you buy them from a hardware store and arrange your own labor the price is not too bad. Also the PUD will offer rebates, so check with them. Hope this helps.

Electric heat they are going to complain, it is amazing to me that people can't understand that the thermostat is connected to the dollar amount they pay in electric and heat cost money. They also don't understand you pay electric normally and in winter your electric will go UP, the additional cost is what you pay for heat. So if it is normally $50 for electric and in December you pay $150 that  $100 is the cost of your heat.   You have done what you can.  The only thing I don't see if you mentioned was a programmable thermostat. I would assume you have that.  You could also tell them to call the electric company to see if they can go on a budget plan where they average the cost over all the months.

I am with the people who say let them look.  If your place is competitive they will find out when they look and decide to put on a sweater.  Don't be reactionary with upgrades, do the energy audit and plan updates accordingly on your timeline and budget.

The good news is that you're going through what every Good Landlord goes through when they're getting started. You want to make your tenants happy. However, I think you probably understand at this point from the experienced investors' reactions to your post that there is only so much you can do and it's really more on the tenant than it is on you. You're not going to replace a perfectly good furnace because your tenants are unhappy with their bills, and you have already gone above and beyond by having newer windows, weatherseals, door sweeps, servicing the system, etc. At some point they have to understand that utility bills are tied to tenant use and you as a landlord have little to no control over them. Therefore there really isn't anything you can do to help other than informing prospective tenants honestly before they move in. After that, it's on them. Now you're next challenge as a landlord is breaking that news to them in a way that doesn't get them throwing a tantrum like a 5 year old... Good luck and welcome to the wonderful world of Real Estate Investing!!!

Had something similar with a complainer or a tenant, she moved from a 600sq foot apartment into our 3000sqft townhome, the first summer she complained about the high electric bills for cooling. She kept complaining, until she convinced herself that it was a problem with the central air unit, it had to be defective. She was an internet detective sluth so she got all her info from the internet to what the problem was. She demanded we have the unit serviced, clean the ducts, have the electrical panel checked...

We finally told her we'd do all of that for her, if their was something wrong with it, we'd pay for all the diagnosis costs and fix any problems, however if the techs gave it a clean bill of health she would be responsible for all of the diagnosis costs. Never heard another word from her about it.

This place is heated with a furnace only no heat pump.  I have two units up and downstairs,  My down stairs unit i use is larger and has a heat pump, my bills are about 200$ lower.  however i know my usage, one shower a day and have been keeping my house between 63-65 no higher.  

I had this issue with a tenant last year. "My electrical bill is skyrocketing and I don't know why, come check it out." I went by to check it out on my lunch break on wonderfully hot aug day. It was an ice box inside the house with nobody home, all blinds open, and a blanket on the couch for when she got cold I guessed. Looked at thermostat she had it sat at 60deg. I laughed set it to 75 told her not to touch it and tell me what it did for her power bill. cut it in half.Same thing happened this Winter. she had thermostat sat to 90 complained about heating costs. Go over she's in tank top and shorts. Shake my head, tell her to turn down heater to 72deg and if she gets cold at that temp to put sweat pants on.

In terms of best bang for your buck when it comes to energy consumption for heating or cooling, it won't get any cheaper than fiberglass insulation. If your roof insulation is accessible and less than 8" thick you should definitely add. Fiberglass runs a hair over R3 per inch. St Louis would do well with an R30 roof insulation, R40 wouldn't hurt. More than that and the cost starts negating the benefits. 

As others mentioned, windows are good to replace for more energy efficient models. The cost is often high compared to the energy benefit though. Of course weather sealing is crucial. Most homes consume 40% of their heating/ cooling energy due to air leaks.

Last, electric heat is a sad way to heat unless your local electric company offers an off-peak deal. Some areas of the US have deals where you can purchase electricity in middle of the night as long as you have a storage medium (they make special electric heaters with masonry storage for reasonable costs) for a very reduced cost for the electricity.  If you don't have that kind of offering from the electric company you really ought to look into a different fuel for heat...if you're inclined to give the tenants a break on heating costs.