Should You Include Utilities in Your Monthly Rent Price?

If you are a current landlord, or if you have a property and are looking into being a landlord, you may come across the question of whether it makes sense to include utilities in your monthly rent price. There are many different pros and cons to including utilities within the monthly price that you charge your tenants, and ultimately, it depends on your own personal preference. If you are in the midst of deciding what works best for you, check out some of the pros and cons that we have listed out below to help you think through:

Pros of including utilities within the monthly rent:

  • If your unit that you are renting out is not separate from the other units, then it may make sense to include utilities within the monthly rent. By separating, it may become difficult to figure out which units are using more utilities than others and may create some backlash from tenants.
  • Sending out individual utility bills may become a hassle for you to do each month. By including utilities within the rent, you are simply charging one lump sum, which is easier to keep track of.
  • You can potentially make a bit more money through your monthly rent price if you are charging more for the service of having utilities included within.
  • If utilities are included within the monthly rent, you are not charging a “per person fee” which is a great perk for larger families who move into your unit.

Cons of including utilities within the monthly rent:

  • Ultimately, if you require tenants to handle utilities on their own, it will make it easier for you to simply handle the rent each month and let utilities solely be in the tenants names.
  • If tenants know that utilities are included, you may notice that your utility expenses will increase as they will not be as careful with electricity, heat, water, etc. knowing that they are paying a standard price each month.
  • It has been said that tenants who are able to get all utilities in their own name can be more responsible, reliable tenants to have.