How to manage utility bills while listing rental property

Question

Hi everyone,

I am new to out of state investor and have a quick question hope to have some clarity.

Current investment property is managed by a property management and still in process of listing. During this period, how should I handle the utilities bills? Would property management take care of those bills and forward the payment to me? Or do I need to opt in under my name while property management is listing the property?

Thank you in advance!

Nathan Gesner · Answer

As a PM, I offer to handle the bills for the owner. I receive them, pay them, and then bill back to the owner. My vacancies are pretty short and utility bills are typically a month behind actual use. By the time a bill arrives, I typically have a tenant in place and rent money on hand. I deduct the utility charge from the rent income and provide owner with a copy of the bill so they see what I paid for.

Theresa Harris · Answer

Your PM should handle these and bill you for them.  When you have a turnover, same thing. They don't always do this (speaking from experience where they forgot), so double check that they did it.  Most utility companies if you tell them you are the owner and it is a rental, won't ask for a deposit to set up a new landlord account.

Nathan Miller · Answer

Ideally your property management will take care of the bills, but not all managers offer this.  Some want the owner to handle the utility bills, which isn't ideal because the owner doesn't have insight into exactly when the tenants move in/out.  The important part is making sure when a tenant is placed that the utility is changed into their name on the same day, otherwise you end up paying the tenant's utility bill.

Melissa Nash · Answer

Its nice when the PM does this for you, but they don't always. And they will charge a fee for it. Its not that hard to set up & pay yourself. But the ease of a pm doing it is nice. I have done this just so I don't have to stress about the timing and making sure the tenant turns into their name. At least the PM tracks that for you. Best of luck!

Tracy Streich · Answer

@Jin Mook Choi  Every PM does it differently.   We ask owners to put them in their name until it is rented.  We then notify of the move in date and owner schedules to turn them off.  This is on the initial onboard only.  On turn over the management company handles the utilities.   The main reason we do this is we don't have funds to pay for the utility bills until we have collected rent unless the owner makes a contribution.  We have found Most would rather turn it on themselves.

Jin Mook Choi · Answer

thank you for all the valuable inputs!!

Michael Smythe · Answer

Depends on what your management agreement states.

We require the utility bills to be in the name of the property owner, but we get the bills and pay them - assuming the owner has funds in their portfolio with us.

Eliott Elias · Answer

Either or works. They are getting paid at the end of the day.

How to manage utility bills while listing rental property

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