Anyone here paying utilities for tenants?

Hi all,

Was after any experiences from landlords here who pay the gas/elec/water utilities bills on their IP's and either charge a flat higher rent to compensate, or wear the cost (i.e. if you have dual living but only 1 meter for gas/elec so tenant cannot have these bills in their name).

Have you found that when tenants are not paying the actual bills, they will increase their usage significantly, i.e. leaving the heater/air con on all day/night? Or are they generally reasonable?

The reason I'm asking is that I'm trying to work out what a reasonable price is to increase the rent by to compensate for paying the utility bills and want to keep things simple so thinking of charging a flat amount of say $XX per week.

Cheers

 

We pay water for a dual occ. Don't charge extra and in fact the usage is less than another single in the same area.

 

Tenants would mostly not take advantage of the situation as they would expect a rent increase to cover increased utility costs should they go nuts with air conditioners, heaters, lights etc.

Best way to work out a flat amount is to simply get a year's worth of bills and divide by 52 to give you a weekly average and then round up or down to the nearest $10 or $5.

Yep, pretty much verifies that reasonable people will not want to attract a rent increase and would also be appreciative of the benefit of not paying utility charges.

 

We pay for water but not electricity. The front garden is on auto irrigation and we choose to maintain the front garden ourselves. I suspect electricity is the main area where usage can go ballistic with heating, air-conditioning etc. and we would prefer to apply a little "discipline of the market" to that usage.

 

I have dual occ that have separate electricity, but not separate water meters, so I pay the full water bill. There was one that had a massively high water bill (like $1000 instead of $400), but the issue was found promptly and resolved. I do not find the tenants abuse the use of water. The rent is fairly good, but I haven't seen many other places on the market like them, so difficult to do a direct comparison.

Cheers,
Inertia.

 

i think its safe to assume that its human nature to subconsciously or not to abuse the "all you can eat" arrangement,
all comes down to how much

 

I'm not so sure about "abuse", but perhaps not have the same level of concern, thats for sure!

Given recent water shortages and the associated water saving campaigns, I do think people generally do not just waste water willy nilly...

cheers,
Inertia.

 

Why do we pay the water bill?

I feel that with water usage many of things that go wrong with plumbing leading to high water usage are the landlords responsibility and would require reimbursement of the tenant for excess usage if a problem arises. While leaking pressure relief valves on the hot water, damaged pipework, leaky toilet etc will often be noticed and reported by a tenant they can be missed leading to high water usage.

LLs already pay the service part of the bill so why not reduce the workload and simplify things by not splitting the bill and passing it off to the tenant.

I also a read a few threads on the need for water efficiency reports being needed for qld? LLs to charge for water and LLs already pay the charges other than usage. Avoiding paying $100+ for a water efficiency test by paying for the usage and upping the rent a little. Plumbers are rich enough.

 

Its still abuse in my mind, and I'm guilty of it

Eg when i stay in a hotel, I leave the air-con on when leaving the room so when I come back it's cool,
I'd never do that in my house

 

The water usage charge is bugger all not worth worrying about $3.00 a week but I allow $5, Heating is solid fuel I give them a couple of bags of grain from bunker wastage obtained for free. I give them $150.00 a month of electricity any surplus tenants split between themselves. Unlimited Wifi $80 a month. $ 240 a month covers utilities, $60 a week, then I add another $60 a week to cover insurance, council and water rates. Then I know the weekly minimum rent I need to get my minimum benchmark 5% return.

 

Based on my experience, peoples water habits don't change a whole lot whether they're paying or not- though you could get the odd lawn waterer who thinks it's worth an extra $300 a quarter to have green lawns . Different story with power, give them free power and suddenly it looks like they're running a laundromat!?

 

ive "heard" drug labs use a lot of power too!

 

My dual key has one pair of meters for water so I have to pick up the bill - usage is more than I would expect - total bill this year will be about $2200. Most investment owners got the metering separated soon after completion but I didn't as I was living in both halves. I tried to get a quote at the end of last year from the plumbers suggested by the building manager but this wasn't forthcoming. Really needs doing when both halves are empty so the pipework can be unpicked at leisure.

 

They usually steal power from the neighbours anyway

 

I've rented from landlords who have covered bills and didnt materially change my behavior.

On a relatable note I have also held the lease (and therefore utility bills) for many sharehouses over the years and to be honest its easier working out a reasonable flat rate to cover everything than splitting it up each month/quarter. Sometimes you win and sometimes you loose, but it averages out to be good enough.

If someone does abuse this arrangment I dont think its going to be an expensive problem for water, but energy could be.

In anycase I dont think people change thier behavior in any great way, rather some people are just naturally careless (or frugal) when it comes to these things in the first place.

 

I've seen it go bad with water and electricity but more so on the electricity end. My parents had a rented flat underneath us when we were kids and the electricity bill doubled a few times and then I've seen it when tenants don't even bother notifying the PM when there are water leaks, but as soon as you charge them water they complain at the slightest water leak.

 

I think it will depend a lot on your tenants. Sorry hard to know.
Sounds like some people expolit "all you can eat". Most of the people I know are too environmentally aware to do that. My current tenant uses surprisingly little electricity.

 

You cant approach a tenant and say I want you to pay a extra $XX a week for ultilties as its often illegal. Ditto you cant charge for rates or land tax etc You can up the rent but cant now say its for the electricty as it could end up before a tribunal who will then see a later rent request as a disguised extar charge. You will never win.

Its very hard to add on to rent once you start without it but with a change of tenants it can allow you to have a more inclusive rent. Adding on to rent for utlities with a tenant can invoke the wrath of a tribunal.Changing to separate meters while someone is already a tenant can also get a tribunal involved since its not generally a matter contemplated during a lease period. Its a bit like moving one of their walls without asking if they would have leased a smaller property.

A smart owner should ensure the tenant is paying as much as the market can bear. Whether that is appealling to occupants is another matter.

 

The problem with high rents is that you never have tenants stay for long periods of time and end up losing money during vacancies. I think these lawmakers should take them into their own homes if they care so much about them, I'll bet that never happen.