Incorporating HOA-internet fees into rental price

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Incorporating HOA-internet fees into rental price

Joseph D.
Investor · St. Johns, FL · Member since 2016 · 13 posts · 2 votes

Hello,

My HOA recently increased their fee due to the inclusion of internet service. How do I incorporate the new fee (approx 70 dollars for the internet) into my calculations? Can I increase the rent or do I need to eat the cost? Also, the increased fee only includes internet. If you want cable TV, it is extra... however, obviously you can bundle it for a deal. Should I buy the bundle and use that cost or just stick with the internet and let the tenants decided how to handle cable TV (assuming they want it). Any advice is really appreciated. Thank you.

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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
6y

Obviously you can’t change any existing lease, unless it is month to month. The market/competing units will determine how much you can charge going forward. 

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    6y

    Obviously you can’t change any existing lease, unless it is month to month. The market/competing units will determine how much you can charge going forward. 

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  • Anthony Dooley
    Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
    6y

    I would offer the services to the tenant at an additional cost. They would have the option to pay extra rent, which includes the services. If they opt not to receive the services, I wouldn't give them the access/password etc. Of course it helps if you can sell them on the benefits of the services, but it cannot be a condition of the lease.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    6y

    You probably need to eat the cost for now. In the future, you should have a clause in your lease that says any increased HOA fees may be passed on to the Tenant.

    Why would the HOA buy a package internet service and force everyone to use it? That only makes sense if they are getting a discounted service. I pay $50 a month for 200 MBps in rural Wyoming so $70 a month sounds high. Are they profiting off it?

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  • Joseph D.
    OP
    Investor · St. Johns, FL · Member since 2016 · 13 posts · 2 votes
    6y

    @Wayne Brooks, thanks for the info.  @Anthony Dooley, I appreciate your input. Definitely something I am going to look into. Thank you! @Nathan Gesner, thank you. Yes, will definitely include a clause in the future. Hmm, good question. I live in Loudoun County, so things are pretty expensive around here. I'll ask some of the neighbors for their thoughts, hadn't really thought about it before. 

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  • Adrienne Green
    Real Estate Consultant · Chattanooga, TN · Member since 2018 · 384 posts · 330 votes
    6y

    For your current tenants, I'd offer your current tenants the opportunity to include internet with the rent and cancel their current plan. You could say whatever they're paying for internet now, they can pay to YOU instead and they'll get the internet offered by the HOA. They may be paying for a lower level of internet service, and paying less, but this strategy would at least offset part of your increased cost.

    A lot of people don't pay for cable service anyway, so I wouldn't worry too much about internet being included and cable TV not being covered.

    I don't see any other way you can include the increased HOA cost with your current lease, but I would certainly consider increasing the rent to cover the increased cost when this lease comes up for renewal, or when you get new tenants.

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