What utilities do you cover/pay for your tenants ?

12 Replies

Hi, all

I searched but only found threads in the other states/cities/markets, and the answers to my questions appear to really vary a lot from state to state.

I would like to specifically know in DFW what the owners cover for tenants when renting a SFH out.

My common sense tells me that tenants are responsible for electricity and gas for sure, and owners pay for HOA, property tax and home insurance.

Do you require your tenants to have a renter's insurance as well?

What about water/sewer/trash? Is the bill for water/sewer/trash attached to the owner or transferable to tenants?

Do you also pay for lawn mowing and/or termite/pest control service?

At what level of repair/maintenance do you offer as long as tenants do not break with their abuse/neglect? (i.e. bulb replacement, A/C filter replacement, etc?)

Thanks a lot!!!

@Sehun Kook - It all depends on your market and area. In my market, I don't pay for anything on my SFH. I make the tenants pay for everything, including water/sewer, lawn and snow. Your market may be different though. Scope out your competition and see what they're doing.

I have rentals in DFW. I pay for HOA dues, property tax, and dwelling insurance. I pay for pest control. I have a contract with a company so they do all my units.

The tenant pays for all utilities.  They have to maintain the lawn. If there is a pool, they have to maintain it or I increase the rent to cover that. They can choose renter's insurance, it is up to them.

Sewer and trash are part of the water bill so they go on the tenant.

Small maintenance like light bulbs and air filter are on the tenant.  Anything beyond that is on me.

I hope this helps.

Thanks @Neil Aggarwal

I found some threads on BP that some tenants did not pay water bills for a long period of time and all those bills came to the owner because water/sewer account could be set under only the owners in some states.

Even the lawns and yards are taken care of by the tenants? Is that a general practice or case by case?

I actually thought that the owners should handle the lawn and yard just like big apartments managements do.

Thanks again for your feedback. Your input really helps. 

It is ultimately the owner's responsibility to pay for anything related to the house. You don't want a lien put on your property.

In Texas, the tenants have their own utility accounts.  They are not under the owner.

Having said that, if anyone sends me a bill, I pay it immediately.  I then ask the tenant to reimburse me.  If they don't, I deduct whatever is owed to me from the next rent payment.  If that leaves some of the rent unpaid, I send them a notice to vacate and follow up with eviction for non-payment of the rent.

I have never run into a landlord that maintains the yard for a single family house. That would be unusual for this area.

I am currently renting an SFH in Frisco, TX, and as Neil stated (with the exception of any HOA dues, property taxes, and insurance) the tenant pays for all utilities and lawn maintenance. I am also required to have a renter's policy although PM has never requested a copy. This is very common in the DFW metroplex and I would assume throughout Texas [although I try not to make a habit of assuming].

Renter's are also typically required to change out air filters every 3 months and normal things like light bulbs.  

Of course, renters are "technically" paying for property taxes, HOA and insurance as a smart investor would ensure this was covered in the rent amount. The renter is just not physically responsible for making those payments.  

@Sehun Kook ,

I think that what you have as responses from @Neil Aggarwal and @Mark Martinez

are accurate as far as the owner paying for the building expenses and passing other things like repairs and such to the tenant. 

I will touch on the insurance part a bit.  You want to have good landlord insurance of course, but I would also recommend that you require your tenants to have renter's insurance. 

If your properties are nice, most tenants won't have a problem.  When I rented, it cost about as much to have renters insurance as not, because my insurance company would bundle my autos and renters. 

So the math looks something like $200 for auto insurance w/o renter insurance.  Then if I got renter's insurance that would be $50 and my auto insurance would go down to something like $150 or $160.  So the net is that it would hardly cost anymore.

The important thing about renter's insurance is that when your tenant has a guest who comes over and spills boiling water from the stove on their hand and gets 3rd degree burns and now can't work for a month after an expensive hospital visit, who do you think they are going to come after for some money???

Yep, you as the landlord. 

So if your have renter's insurance as the first line of defense, then if there is a claim for $5000 or $10000 it would probably be covered by the renter's policy before it would go to your landlord coverage. 

It really adds another line of defense for you as a landlord. 

It is a hassle to get your tenants to show proof of insurance and in some cases the tenants won't do it. 

Good luck on your real estate journey!

Originally posted by @James Call :

It is a hassle to get your tenants to show proof of insurance and in some cases the tenants won't do it.

That is the problem I have with it. Just not worth the amount of pain in the rear for the rare events that it covers.

Well my wife and I would have had a renter's policy no matter what.  And James is correct...it's a wash with the auto/life policy.  In fact, we may have ended up with a net gain in the end with the multi-policy discounts.  Again, we have never been asked to show proof, but I can see how renter's who have no intention of following the rules would be reluctant to providing proof.  

You are on the right track...on single family normally tenant would pay water/sewer/trash. Exception is condos/townhomes where it is often included in HOA dues and owner pays HOA dues.

Lawn care is normally tenant expense....although they will do the minimum in many cases.  You might want to pay for weed/fertilizer.  

Yes you want them to buy renter's insurance.

Termite is owner expense if you need to treat.

Normal pest control should be a tenant expense....and in our normal TAR lease that is laid out.

Taxes, Insurance, HOA fees typically expense of the owner.

I have seen a handful of owners offer some money off summer water bill to help keep tenants watering the yard.  You want them to do this to protect the foundation.  Nice if you have a sprinkler system and tell them don't touch the settings and lock it up....

I advise all my owner clients to replace the filters themselves when they do their landlord property check quarterly....otherwise tenants don't change air filters unless you get super lucky.  Even when it is in the lease.

Tenants are responsible for light bulbs and other basic maintenance.

I've seen a few owners include yard care and pool care in the rent.  That way you know it gets taken care of.  Good idea probably not to have rentals with pools though.  

We have long-term rental properties in NJ and MI. In NJ our tenants pay all the utilities and are responsible for lawn maintenance. In Michigan, however, landlords are required to pay the water bill. All of our Michigan properties take care of the lawn maintenance with one exception. 

I like to cover gas and trash, because the tenants see gas included as a value to them, and I cover trash to ensure that my tenants NEVER store their trash in my property! I've heard the horror stories.