Oil Heat - Included In Utilities?

Question

I'm trying to rent my 2nd floor in my owner/occupy, but I'm running into some resistance on my heat utilities as I have oil heat/hot water.

Currently I am including water/sewage but tenant would pay electric/heat/hot water.  I'm wondering if including water/sewage/heat/hot water with the tenant only paying electric would be a good way to get around these hesitations?  I'd make up for it by charging a higher per month rate, around $150-200 more/month.  My unit is a 2BR/1BA 800 square foot unit, am I setting myself up for significant pain in the future?

Truthfully I can't even estimate the heat costs for that floor - this is my first landlord/tenant/house experience.

Nathan Gesner · Answer

If you can't determine a guesstimate for utility use then you'll have to throw out a number and see what sticks. If nobody rents, you know the price is too high.

Let's say the utility was an extra $200 a month and you split that with the tenant. Do it on a temporary basis with the option of raising the utility charge after XX months based on actual use. So if you charge $200 but the actual use is $300 then you raise the tenant's share accordingly.

Dick Rosen · Answer

I assume you have only one source of heat for both up and down. I would prorate the heat bill every month based on square footage and give the tenant a copy of actual bill to verify your math.  And maybe you need to shop your market to see what others are doing.