Utility management: How do you manage your utilities?

Question

As we've grown to 120 units we continually struggle with managing the utilities for our rental units. Starting, stoping and transferring service has become quite time consuming. I have tried reaching out to utility management companies but have not had success as it seems most of them are either area specific or only except large portfolios.

Does anyone have a good solution to the time consuming task of managing their utilities when they purchase, sell or rent their properties out?

Aaron K. · Answer

Ask the utility, out here Edison and our water, and gas companies have programs for landlords where the bill will convert back to your name when someone cancels their service, it is great.  Hopefully your utilities have a similar program, if not I'm not sure what the best way would be

Nathan Gesner · Answer

I deal with a municipality, two electric companies, a natural gas provider, and a water provider.

Eric James · Answer

That sounds like quite a complete, convenient service. Are all 340 of your units with the same 1 utility provider? Do providers of electric, water/sewer, and gas all provide this service?

Nathan Gesner · Answer

I'm with @Aaron Klatt. Our utilities all provide a "Landlord Revert" program or something similar. When a new tenant sets up a utility account, you remain on the account as the Landlord. If the tenant is behind on bills, facing shutoff, or cancels their account, the Landlord is notified. If the tenant fails to correct the situation, their account is shut off but the utilities revert back into your name so there is no risk of freezing a house or some other issue.

I manage 340 units and the utility company notifies us any time a tenant starts an account, closes an account, or gets behind on an account.

Dick Rosen · Answer

Some utilities have a landlord program that you can sign up for. This program keeps utilities on all the time and automatically transfers from your name to the new tenants name and vice versa. I do not like this program because... we still have the administrative task of following up to make sure the tenant does in fact put utilities in their name and sometimes the forget!

We simply added the task to our move out and move in task list. When we get notice that a tenant is moving out on the 30th we automatically call the utilities and put them in our name on the 1st. When we get a signed and paid lease, we automatically call and have utilities turned off.

Eric James · Answer

If one has a software system that eliminates human error, great.  Something like a system that won't allow a utility expense to be entered for a rented unit. Otherwise, I'd be concerned that something like this could be missed.

I don't doubt there are tenants with the chutzpah to have their utilities turned off, whether on purpose, because they were going on vacation, due to nonpayment of their bill, or some other reason one could never anticipate.

I like the idea of having the utilities automatically revert to my name, I'm just concerned about something going wrong.  From my experience, anything that can go wrong will go wrong, at some point.

Aaron K. · Answer

@Eric James even with a large number of properties, someone should be doing the accounting, whether that be you, a property manager, or an accountant.  If not you have bigger problems.  You should only have 5-10 units in turnover at a time with a portfolio that large so any utility expense outside of those properties should raise a red flag.  Also even if a tenant knew about the program (most don't) and was able to sneak it by you (which it would take a lot of chutzpah to try) they would be in violation of the lease and could risk eviction and would almost certainly lose the portion of their security deposit required to cover the utilities.

Eric James · Answer

If someone has 120 properties, likely they have a number of units turning over that they are receiving utility bills for. This could make it easy to miss one.

With that many units, I'd also think it likely that these would be set up to automatically pay electronically, increasing the likelihood of missing one.

Aaron K. · Answer

@Eric James You would know, because you would get the bill.

Eric James · Answer

Is there a way to be alerted if the tenant cancels their utility service in the middle of their lease term (or never puts it in their name in the first place), and then it automatically goes into the landlords name?

Utility management: How do you manage your utilities?

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