Hi,
How do you handle utilities for rental properties? While rehabbing we will need electric, water, etc… Once we get a tenant in place should we cancel utilties and have tenant set up in their name? Can we transfer utilities to tenants name? Or keep in our name and send copies of bills to tenant to pay?
Thanks for the advice,
Mattman
A lot of utility comapnies have an option where the utilities are in your name and then they transfer to the Tenant’s name/responsibility. In the priods of vacancy (when you and the tenant contact them), it reverts back to your name but there is no actual “cut-off” and there is no “re-connection fee”…it was saving about $30 per property, per utility, per tenant turn-over for us…
Keith
I can vouge for what Keith said in my area, too (for the most part). The water, sewer, and gas all get reverted back to the owner. The electric company (TXU), unfortunately, makes you disconnect and reconnect each time. BTW, if the tenants don’t pay their bill, you will (for those utilities that revert back to the owner, anyway).
Mattman,
You want the utilities in the tenant’s name. Keeping the bills in your name and then giving the bill to the tenant is a terrible idea. What happens when the tenant stops paying the rent and the utilities? Your loss is just that much greater.
Mike
I keep the utlilities in my name, and bill the tenants. Just be sure to take an accurate reading during move-in and move-out. This way, I won’t find that the water bill wasn’t paid for two years like I once did, nor the oil tank running empty, gumming up the heating system.
In some jurisdictions, the landlord is responsible when the tenant doesn’t pay, like my water bill.
Even if the landlord is clearly not responsible such as for phone bills, I had tenants skipping out on all utilities, including the phone, that when the new LEGIT, REAL people move in, I have to sign affadavitts that these are real people, not false names for the former tenants to get service.
I turn the utilities on in my name while we rehab. When the tenenat moves in on Monday I tell them to get the utilities in their name because if not they will be disconnected by Tuesday.
Some of my properties are locating in the coldest city in Minnesota (50 below windshield last winter). For the most part in those cities a landlord has no choice but to pay the utilities because tenants can’t have the fluctuation of a $75 utilities bill in the summer and a $350 bill in January and February.
If you do end up paying the utilities for your places then you may not like the fluctuations from summer to winter. Once you have owned your properties for 1 year you can have the utility company average out the utility bill based on last years usage. So you receive the same bill every month regardless of winter or summer.
I don’t necessarily recommand paying utilities, but if you have to pay them, I do recommand that you call your utilities company and have them set you up on a program that allows you to pay a flat rate based on the year befores utilty usage. Also I take extra effort in making sure that plastic is on the windows, places have insulation blown in them and use the temperature limiting thermostats. Whether you pay for utilities or not you want your places to be insulated, or you will lose tenants due to high utility bills.
Also I want to note that some towns do weird things, my local water dept won’t allow the water/sewer bill to be put in a tenant’s name. The landlord must be the person on the account, I guess so they can definitely get paid. At one point I was renting from family…the rent was low but he passed me the h2o bill every month (well every quarter to be precise) and I paid it directly. Now where I am the LL pays it directly, based on what I know about some of his tenants I wouldn’t be trying to get them to pay the bills as I doubt they pay all of the ones in their own names.