Do you really save money when utilities are included in rent?

Property owners have the opportunity, in most cities, to decide whether they want to include utilities in their tenants’ rent.

They calculate an average monthly cost for utilities and bundle that cost into the rent. So it’s very important to determine what utilities cost before assuming responsibility for them.

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Any lease agreement should lay out clearly what utilities are included in the rent, if any, as well as any local requirements as to what provider must be used for any particular utility.

The pros of including utilities in monthly rent

The owner can charge a premium

For taking on the responsibility of paying the bill, the landlord can charge a premium.

Ease for residents

Once the process is set up, the tenant has just one bill to pay each month. This may be attractive to clients who want to minimize administrative hassles.

The cons of including utilities in rent

The owner takes on the liability for paying the bill

If a resident is responsible for the electricity and doesn’t pay the bill, the utility provider will compel the tenant to pay, and may even cut off service.

Tenants may have no incentive to conserve

Residents may not be inspired to save energy if they feel they are not paying for it, and might be less conscientious about.

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