Which Utilities Should Be Included With a Rental?

For detached homes, it's customary that the tenant pays for most utilities, including electricity, gas, heat, water, lawn maintenance and snow removal. On multi-unit homes, tenants typically pay any utilities that service only their unit, and aren’t shared or utilized in another unit or common space.

Let’s dive deeper into some things that you’ll want to consider when trying to determine which utilities to include in your rental home. In this article, we’re going to cover:

1.  Single-unit vs. multi-unit homes
2.  Shared meter conditions
3.  Dangerous situations

Single Unit Homes

Here in the Hudson Valley, it’s customary that most single unit homes will require the renter to pay for utilities. This includes:

- Electricity
- Heat
- Hot Water
- Fuel
- Gas
- Water and Sewer
- Trash
- Lawn Maintenance
- Snow Removal

There are exceptions, however, which you’ll want to be aware of before rolling out a blanket “tenant pays all” policy.

Exceptions

If a utility or maintenance item is going to be a larger than average expense, or burden on the tenant, you may want to consider including it in the rent, or determining a concession that both parties can agree to.

For example, if you have a larger than normal property that’s going to require a ton of maintenance, you may want to consider including landscaping services in the rent. Many renters will be turned off by the idea of mowing 6 acres of lawn during the hot summer months.

It’s good practice to take a look at any utility, amenity and maintenance items that your property requires, and see if it’s in line with other comparable homes for rent. If not, consider making adjustments for anything outside of what’s typical in the market.

Multi-Unit Homes

For multi-unit homes, it’s very similar to single-units, with a few exceptions; smaller units, and shared meters.

Smaller Units

For smaller units, we find it’s common that more utilities are included in the rent. For example, it’s very rare that a studio apartment will require the renter to pay for things like water, sewer or trash. In fact, we’ve seen many smaller units that include all utilities. It really just comes down to what the overall market is offering, and how your unit compares with the competition.

Shared Meter Conditions

A shared meter is any situation in which one tenant is responsible for, or paying for, a utility or service that benefits others.

A common example would be lights in a common hallway. If tenant 1 is paying for the electricity to light a common hallway that’s used by tenant 2, that would be a shared meter condition.

There are many instances where a shared meter condition exists, including things that aren’t actually metered. Some of them include:

- Lighting and heating in common spaces
- Appliances used by other tenants
- Water and sewer bills
- Trash and recycling
- Maintaining and cleaning common spaces and hallways
- Grounds Maintenance

It’s important to assess all utilities and maintenance to avoid any shared meter conditions. If you aren’t able to separate out any items for use exclusively by the tenant that’s paying for it, then you may want to include it in the rent, or come up with an agreeable concession.

For public utilities, the utility company may be able to help you determine if a share meter condition exists, and if it can be corrected or resolved.

Ignoring shared meter conditions could result in fines, back billing, and utilities being placed in your name until the situations is resolved, so it’s important to address these upfront, before they become an issue.

Dangerous Situations

The last item that we’d like to discuss is dangerous situations. While it’s customary for tenants to take on certain maintenance items, like lawn maintenance and snow removal, you may want to consider the risk of tenants being responsible for things that could be dangerous.

For example, if a tenant is responsible for cleaning gutters, there is a risk that they may be high up on an unsturdy ladder, or walking around on the roof. This could be very dangerous, so you may consider having this service included with the rental, and hiring a professional to handle it.

We always recommend checking with your insurance agent to get guidance on what things you may or may not want to include, and ensure that you have the proper coverage in the event tht something goes wrong.

We Can Help!

Not sure what utilities you should include at your property? We can help! Schedule a Free Rental Estimate. This great free service includes an in-person site visit with a Hudson Valley rental property expert, a free estimate of the fair market rent for your home, and an assessment of your utility setup, with recommendations specific to your property.

Want to find out more? Check out our video Which utilities should be included in your rental?

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