Student Housing - Utilities

Student Housing - Utilities

Investor · Owings Mills, MD · Member since 2015 · 52 posts · 9 votes

I'm about to close in on my first purchase which will be intended for student housing at one of the local universities [that my son happens to be attending - and interested in living in a group house instead of an apartment ... so it seemed a good choice as a starter for me].

Here's my quandary:  As a mom paying the rent, I liked when my older son's residence included a utilities stipend [wording?] so that, for the most part, no extra fees would occur.  Yes, they often ran over the electricity and we got small charges [cold winter, more heat...], but they were small and manageable.  Therefore, I'd like to include the electric, water and internet as a courtesy.  Perhaps something like this:

UTILITIES:  Electricity, Water and Internet shall be paid by the tenants.  Owner agrees to carry all utilities based on a "budgeted plan payment" of $_______ per tenant each month.  A late fee of $5/day will be assessed for utilities in addition to late rental fee.  If adjustments are required, they will be addressed via email to all tenants.

SO - I'd like YOUR thoughts on whether I'm crazy to include the utilities... and if I'm not [well, if you knew me ... but we're talking specifically about utilities here] - does the above sound like a solid clause?

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  • Real Estate Consultant · Atlanta, GA · Member since 2015 · 173 posts · 46 votes
    11y

    I say to keep it simple (less work for you) just split the total utility amout up by that spaces are to be occupied. So if there are 5 rooms total and the total utilities(gas, electric, water, trash, etc.) comes up to $500 a month each room rented pays $100 a month. I know BGE does a budget plan that keeps it at a steady rate for a certain period of time and then it changes. I personally like it when i know how much i am going to have to pay instead of having fluctuated rates all year round. As a college student my monies would be very closely watched. So knowing that id have to pay any where between 100 to 170 all year round is awesome to me because i know how to budget my money appropriately.

    I dont think you are crazy at all for including utilities for college students living off campus. Utilities have to be paid somehow and if you can get them to pay for what they use then thats great. School campuses dont have to worry about things not getting paid because everything is paid upfront before they even go to their first class. But as a landlord you have to wait for your money unless you do some type of room and board plan like the schools.  

    It seems as though everything is going well with you Mrs. Lois. You are doing great things so keep up the good work. 

  • Investor · SE, MI · Member since 2013 · 1k+ posts · 461 votes
    11y

    Hi Lois,

    I've seen it done a few ways- I have one house where the utilities aren't divided so I just charge enough more rent to cover it.  Before I make an offer on a property I call the utility company and ask for the average monthly total for the last 12 monthly and factor that in.

    On the house we just bought, the utilities are divided but the landlord was paying for it all anyways.  They had a clause in their leases stating that any combined gas and electricity charge over $175 would be billed back to the tenant, so they were covering the first $175 of any bill.  The highest average bill for any of the apartments was $110 so they probably didn't have too many charges over $175.

    My students and other tenants would probably love it if I supplied internet connections too, but without someone on sight all the time I am not willing to do this yet.

    Kelly

  • Investor · Owings Mills, MD · Member since 2015 · 52 posts · 9 votes
    11y

    @Shaniqua Dupree - thanks for the moral support [as always]!!  I hope to see you at tomorrow nite's meet up

    @Kelly N. - I appreciate hearing from someone who is doing it ... and that there doesn't seem to be a "best practice" for this.  I have a copy of someone's rental agreement that shows a clause like what you've stated and thought that was a great idea.  It keeps the utilities on if I have any down weeks and want to get in there and tidy up or do some rehab. - quick question: do any of your contracts go 11.5 months like Aug 15 - July 31 ??  giving time to fix anything that needs fixing and tidy up.  IF SO, do you charge 1/2 month at the end?

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