Utilities included or not included in rent?

[Joseph Gisler]

I am getting close to buying my first investment property which will most likely be a single-family in which I will live in one room and rent out the others. Has anyone had experience with bumping up the rent by lets say $70-100 than average rent prices and including utilities into rent? My thought process is by averaging the monthly utilities cost and adding it on top of what average rent is, I can eliminate a bill I have to charge my roommates but I am afraid people won't even look at my advertisement to realize utilities are included due to a much higher rent price. Thank you in advance for any thoughts and suggestions!

[Will Fraser]

Hi @Joseph Gisler!  In a shared space situation it can function more smoothly to roll utilities into the rent amount, but if you are concerned that people will skip reading and assume your price is bloated then you could advertise the price as the price and then a separate Utility Fee due to landlord each month with rent.  For example:

• Monthly rent = $600
• Monthly utility fee of $97 collected with rent each month.

This keeps your monthly rent at a lower rate while still disclosing to the tenant that the utility fee amount will be collected.

In general in the future as you look to grow your investments that aren't house-hacks I'd encourage you to not pay utilities on behalf of the tenants unless the market demands it.  In my opinion it creates unaligned interests and that is a recipe for disappointment.