Utility Bill Back (Gas and Water)

[Tim McKinnon]

Looking at a property tomorrow where gas and water are currently the landlord’s responsibility with other utilities paid by the tenant. Just wondering what options there are to put that back on the renters? I’ve heard of tenant bill back and sub metering for water but are there other options?

Thank you for any help!

[Nathan Gesner]

Contact the utility company and get an historical average for use. Divide that by the number of units. Increase it 10% because tenants tend to be wasteful when they don't see the bill every month. Increase their monthly rent by that amount and tell them utilities are included with rent.

Example:

Average for gas: $140

Average for water: $90

Total average: $230

Divided by four units: $57.50 each

Add 10% for each unit: $63.10 each

Increase their rent by $63.10 each month. There's no problem with rounding it up a bit to make it an easier number like $65 per month. Since the base fees are split four ways, tenants are actually paying less this way.

Note: you may want to consider adding a cap in case someone is really abusive. For example, tell them their rent includes natural gas and water up to $70 in use. If they go above that then you will bill the overage to the responsible party or - if no responsible party can be identified - split equally among the tenants.

Note 2: Monitor it each month to watch for overages. Probably the most common is a toilet that constantly runs and costs you hundreds in additional water use.