Utilities included worth the risk?

Medium-Term Rentals
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Utilities included worth the risk?

Jorge Caceres
Member since 2018 · 62 posts · 37 votes

Hi fellow BP fans,

Considering mid-term rentals (MTR) for my single-family home (near two hospitals, targeting traveling nurses/doctors). Most MTRs in my area include utilities, but my California property has very high utility costs (PG&E - could easily be $1000/month with regular AC/heat use). Is it best to simply increase rent by a fixed amount (e.g., $700) to cover this, or are there other strategies for handling utilities in this situation? Any advice appreciated!

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Colleen F.Pro Member
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
1y

@Jorge Caceres  how big is this property?   I would definitely go with a utility cap.  You aren't trying to nickel and dime people but just to curb abuse so it should be generous. The issue will be if you have a number of rooms and a single abuser.  I have a long term rental where I had to put in a clause that I would fine for open windows in winter. That tenant is gone now but it is something I go over on occupancy as unacceptable. 

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  • Jorge Caceres
    OP
    Member since 2018 · 62 posts · 37 votes
    1y
    Quote from @Colleen F.:

    @Jorge Caceres Is this with electric baseboard heaters or  heat pump/minisplits. We did get much lower costs when we changed to minisplits but the initial cost is high.

    Central HVAC unit, very expensive to run.

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    1y

    @Jorge Caceres  too bad that can be expensive. The issue I see with your $500 allowance is that in some seasons they will definitely be seeing a big cost. I would just cap it generously to only catch abusers and figure the normal running costs in your rent.  Otherwise perhaps your winter people will pay $500 extra if your cap is $500 and that is not what your competitors will be doing. 

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  • Alan AsriantsBusiness Member
    Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
    1y
    Quote from @Jorge Caceres:
    Quote from @Alan Asriants:

    $1000/m for heating costs? are you sure? I would get that looked at. But again im not from cali

     Sadly that is a very real number in California @Alan Asriants. Maybe for a newer construction is not but older homes (<1970), it is real. Winter's are cold and summers are hot in northern Cali. 


     unreal!

    [email protected]267-767-0111
    Alan Asriants - New Century Real Estate 590 Reviews
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