Realtor · Grand Rapids, MI · Member since 2019 · 19 posts · 4 votes
Hello,
I am renting out my first property. It is a single family home. How do I go about utilities? Do you have the tenant put the water, gas, electricity, trash in their name and show you proof that they are paying them every month? or do you put the utilities in your name (or in the name of the llc) and just send the bill to the tenant to make sure it gets paid that way?
Curious if anyone ever had any troubles with tenants not paying utilities and how you went about that?
I have the tenants in my SFR put all utilities in their names.
Some landlords will put utilities that can attach to the property (i.e. water/trash/sewer) in their own name to make sure they get paid, and then just bill the tenant for the cost or factor them into the rent.
I wouldn't personally put any metered service in my name (i.e. gas/electric), ever. There's just no incentive for the tenant to conserve and I wouldn't want to get stuck with a high bill. Plus, at least in my area, utility bills like that follow the tenant, not the property. So if the tenant didn't pay them, I'd rather they followed the tenant than me or the property.
Thanks for the response. Who do you use for renters insurance for the tenants ?
Whomever my insurance broker recommends. Technically the tenants are buying it got themselves but it's very inexpensive so you can give them a rebate as a rent credit once they send you a dec page. It just gives you a little more protection. If there's ever a serious loss their personal items are covered by their personal renter's insurance policy. Thus making it more difficult for them to try to recover a=nythign from the landlord if the situation ever arises.
In my experience (and I should do better homework on this), it varies by city. I have properties in Mahoning County, and all utilities follow the tenant. In Cuyahoga County, water and sewer follow the property. I can't put the water or sewer bills in my tenants' names, so I have to invoice them with their monthly rent.
I have property in a town where the borough bills for water, sewer and trash and it is lienable. (that is the city can sell your property to recoop the unpaid bill) In this case I write my lease to be for $x rent and $x dollars for utilities....but I stipulate that the payment is only an advance payment of estimated billing....once the 1/4 bill comes in I reconcile the difference.... too much they get a rebate....to little they owe me. Now... my lease says I will average it out for 1 year. There is a quarterly adjustment to the prepaid utilities. So far has worked well. For most of my properties sewer is a lienable bill ...and is in my case fixed....so I just include that in my rent figures. All other utilities get transferred into the tenants name and you heard the rest above.