Utilities paid by owner or tenant?

[Carl Mayer]

Im a new investor, I have bought my first house which I will use for house hacking. Im currently reading 

Brandon Turners book on Rental Property Investing and ran across a section where he talks about looking for properties where utilities can be paid by tenants, not the landlord. To my current knowledge I thought all properties could be set up for tenants to pay utilities. Im asking this for my next property I will buy in the future. Are there certain things I should know before buying that would make a difference in who pay utilities? Thanks for the Help!! 

[JD Martin]

Depends on the property.

Virtually all Single Family Homes (SFH) are set up where the tenant can pay for all utilities.

Multi-family homes (MFH) are a different story. Many of them have been converted where each unit the tenant pays their own electricity. Far fewer have been set up where each tenant pays their own water/sewer or gas bills. Not all have separate electric meters, especially in cases of unpermitted/illegal multi-family homes. 

*In general* it is best if everyone pays their own utilities, even if there's some cost to break them out initially. I have worked with utilities for more than 2 decades and without fail people use more utilities if they are batched than if they are separate. 

Sometimes you can't easily separate them. In those cases, you need a good track record of what a running average (12 months, to account for all seasons) of utilities costs per month, include it in the rent in some fashion, and be sure to occasionally revisit your 12-month running average costs with your provider to ensure you're recapturing those costs.