Billing Tenants for Heat in a Single Family Home

[Justin Giroux]

I'd like to know the best way to deal with heating in a single family home. As a landlord, I get a substantial discount on fuel oil that amounts to $500 per home per year. In multi-families I just include heat with the rent, but how should I go about this in a SFH? I see three options:

Option 1: Have the tenants pay for it in their own name for full price with a local oil company.

Option 2: I put the oil in my name and bill them back.

• The pros of this is that they will save about $40 a month, which means I may be able to charge more in rent or they may stay longer.
• The cons is that is they may not pay me back. I would have a clause in the lease that says that they only get to use this method if the pay me back for the oil within 30 days or they will have to purchase their own oil at full price. I would also charge a larger deposit to protect me from loss.

Option 3: Include heat with the rent.

• I'm not a fan of this because they have no incentive to conserve fuel.