What is a good estimate for utility costs?

Question

Hey guys,

I tried to look around but didn't find an answer to my question, so here it is..

When analyzing a SFR in Houston (Texas), how much should I expect the following utilities to cost per month?

-Water

-Sewage

-Garbage

-Electricity

If any, which ones of the above do the landlord pay for, and which ones do the tenant pay for?

Thank you in advance for all answers.

Naeem Kapasi · Answer

Thank you for the replis @Tom Cooper@Jd Martin.

So that means that when I am analyzing potential SFR's to buy, I should not factor the utilities in as costs because the tenant will be paying for them? Wow, that'll definitely help on my cashflow as until now, I've been looking at negative cashflow on most of my analyzed properties!

@Tom Cooper, you're from Houston, would you mind giving me the utility costs for one of your rentals? Just to give me a few numbers on what to expect the costs to be?

Tom Cooper · Answer

@Naeem Kapasi,  Sorry I left off this link.  If it doesnt work, Google "Reliant Bill Estimator"

https://www.reliant.com/public/moveBillEstimator.htm#.VsypAfkrJhH

Gail K. · Answer

If you find a place to purchase you can always call the local utility companies and ask for an estimate on what previous utility costs have been for these places.  I tell applicants that all the time when they ask me the average cost of utilities in my rentals (I've never lived in mine and my electrical usage is very low when they are empty).

If they need work you'll be paying the utilities while this work is being done.  Electrical would be minimal when the work is done but the rental unit is empty because you're likely talking about a frig plugged in and porch lights on at night (and perhaps a light or two inside on a timer) to give the impression someone lives there for security reasons.

You'll want at least the electricity on when you show the place (and know where the water meter is or how to turn this on because sure as shooting you'll have some applicants who'll ask to "use the bathroom" while they're looking and it's up to you as to whether you want to agree to let them do this.  I've had at least one with a young teenager who made me REALLY glad I carry a water key in my truck from what they left behind if you know what I mean).

Once the place it rented and with SFH it's up the tenants to take care of the all the utilities except, perhaps, trash pickup.

Gail

Tom Cooper · Answer

@Naeem Kapasi, Unfortunately, I do not yet have any rentals in Houston.   I have live in homes larger than a typical rental and currently in a townhome.  Lots of variables here.  As I pointed out earlier, house size/energy efficiency as well as the occupants, dramatically impacts electricity.  Here is a nice estimator from Reliant which you can plug in an address and get electricity estimates.   I would say on a typical 1500-2000 sf house, I would guess electricity to average $175-$250 per month year round, but could go from a low of $50 in winter to a high of $500 in the summer! Yep!   Water/sewer/garbage - probably $50-$75.  Others can certainly chime in.

Naeem Kapasi · Answer

The average on electricity is pretty high in my opinion! But I mean, if that's the average, then we'll just have to work with it :) Thank you @Tom Cooperfor letting me know about Reliant - didn't know one could check up approximates by looking up addresses.

Thanks @Gail Kaitschuckfor the detailed insights and tips!

Tom Cooper · Answer

@Naeem KapasiAll those are typically paid by the tenant.  Water, sewage, and electricity can vary widely.   Water and sewage can vary widely by the source (City of Houston, other municipality, M.U.D. district).   Also, it is often tiered with lower rates per thousand gallons for relatively low usage, but can escalate dramatically for high usage (heavy lawn/landscape watering, pool refills, leaky toilets, etc.),  Sewage is usually a multiplier of the water usage.   Electricity varies widely based on two factors: 1) provider - we have deregulated electricity service here in Texas, with a wide range of plans and rates: and 2) How energy efficient the home and particularly the A/C unit is.  All the more reason for the tenant to be responsible, so they have an incentive to keep usage low.

JD Martin · Answer

Single family house, you should have the tenant paying everything. You can get basic water/sewer/electric rates from your utility, trash is usually either included in property taxes or added to the utility bill as a fixed charge.

What is a good estimate for utility costs?

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