Pricing rent to include utilities

[Carley M.]

I have a 4-unit building in Buffalo, NY. I am in the process of renting one of the units. The applicant is in a program where she receives a rent stipend up to $960.  Rent on the unit is only $700. The stipend doesn't cover her utilities but the stipend will pay a higher rent amount (up to the $960) if the rent includes utilities. The apartment is only 850 square feet and is well insulated, gas heat.  My thought was to get the average of the bills for that apartment, up it 50% for usage/cushion/profit.

I understand why this is not an ideal model for the other units, but in this case I think I can cover the costs easily with a cushion and even profit because her stipend is higher.

Has anyone worked with pricing models for this? How would you determine the rent amount? Would you be comfortable charging 150% of the average bills if this was your unit?

Thanks in advance!

[Mike Cumbie]

Hi @Carley M.

The biggest problem with something like that in our area is when the Lake Effect snow comes through and they have the heat to 85 degrees and 2 windows open because the breeze feels better. I've even seen it where one tenant told another one that their rent included electricity... who told another tenant. There were extension cords running to the other apartments..... I kid you not.

Just my thoughts and good luck in whatever you decide!