HouseHacking - Leases?

Question

Just bought my first house hack in Colorado! I am writing leases for 3 tenants and am wondering what I should change/add to the lease if anything?

My plan is $800 month to month for the first two months then $775 if signing a 6 month or year lease. Utilities (Electric/Water are split 4 ways and Internet/Trash/Recycling are included.)

How do I structure the split of utilities?

Do I add a rental insurance clause?

Anything else I should change since I'll be living on the property with the tenants?

Thanks for all the tips :)

Mark Hirleman · Answer

@Toni Baca

I would recommend never including utilities, even with a flat fee, for a lot of reasons.  Flat fee is better than fully including utilities because you can advertise the price before utilities, but still, it is not advisable.  We have over 100 bedrooms under management in Colorado Springs and a lot of them we inherited from a previous owner with flat fee utilities.  We also include flat fees when absolutely necessary (like when we rent out a detached garage/workshop separately that is on the same meter).  When paying the utility bills, there is a obvious difference between the properties with utilities included or on a flat fee.  They will keep the AC at 68 degrees in the summer, and the furnace at 78 in the winter, because why not?  (I understand this is easier to control when you are living there, but the principle still applies.)

Our leases include wording that all "utilities" (including trash, internet, water, waste water, electricity, gas) will be billed in arrears based on the exact amount used from the nearest full month bill.   So for example, we just got the September utility bills (technically August 18th through September 18th, but as per our lease this is considered September utilities).  We put it in a spreadsheet, and the amount that each bedroom owes is calculated, and then we upload it into Appfolio and that September utility bill is due with October rent.  Even with 100+ bedrooms, its not terribly time consuming.

Lia Martinez · Answer

Thanks @Bill S., yes I do use a month-to-month room lease and have a set of House Policies for each new housemate in all of my coliving homes. We do not split utilities, that's too much work. There is enough work trying to manage a house of 5+ separate residents, no need to add more!

I just include internet and all utilities in their flat monthly rent rate. @Toni Baca Please don't hesitate to reach out to me if you would like a copy of any of my documentation or to chat about the benefits/pitfalls of this kind of rental arrangement, especially if your home is in Denver. My husband and I also live in one of my coliving homes.

Bill S. · Answer

@Toni Baca you should get with a few local house hackers and see what they do. It's often local. I know @Lia Martinez said she uses a lease and also has house rules. That might be something to consider. I'm sure there are lots of good ideas about how to handle that. You might also tap into some of the local sites that advertise by the room and see how other local handle it.

Julio Garcia · Answer

It looks good. Splitting utilities 4 ways is a good way to get in the lease.

Jeremy Babin · Answer

@Lia Martinez have you run into difficulty with tenants being "generous" with utilities as they're included in the monthly payment?  I've heard of this being an issue so I'm just curious.  I want to house hack in Colorado springs here soon so any input would be helpful. Thanks!

HouseHacking - Leases?

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