Paying Utilities in a Househack

[Andrew McCartin]

For those of you who househack using the rent-by-room strategy, do you include utilities in your rents, or split those monthly expenses among your tenants/roommates? 

I can see the pros (not having to pay out of pocket) and the cons (disputes among roommates) to doing this either way, but am curious to hear how you guys approach this. 

Thanks! 

[Daniel Haberkost]

@Andrew McCartin I do an "all inclusive" price that compensates for the utilities as well. I don't think adding another element to the arrangement that could potentially cause disputes is smart and I haven't had anyone abuse the heat/AC over the several years I've done this so I plan to keep it that way. 

I would just compensate for utilities in your rent and then advertise it as all inclusive.

-Dan

[Andrew McCartin]

Thanks for the feedback @Daniel Haberkost. That seems to be the logical approach; I guess my only real concern with that is the thought of someone looking past my listing because it appears to be more expensive than a room in another house that does not include utilities in rent. Maybe that's just a naive assumption? 

[Daniel Haberkost]

Originally posted by @Andrew McCartin:

Thanks for the feedback @Daniel Haberkost. That seems to be the logical approach; I guess my only real concern with that is the thought of someone looking past my listing because it appears to be more expensive than a room in another house that does not include utilities in rent. Maybe that's just a naive assumption? 

 Try it both ways then, see which gets you the most responses. I made sure I had very nice photos and a thorough description which helped a lot. I also talked about myself in the post which made people more comfortable. In my market, there's a severe lack of affordable housing so there's no shortage of people looking to rent rooms. I would imagine that's also the case where you're at. 

[Sam Lewis]

Each tenant has their own rent based on room, and we split each monthly utility bill monthly. So in the monthly rent reminder email I send them I say they owe me "rent + utilities"

[Max T.]

@Andrew McCartin

When my buddy did it he paid the utilities and he got to control the temperature settings. But he did not have cable or Internet in his name so his tenant would get that and cover the full cost.

[Dylan H.]

@Andrew McCartin

Whenever I was living there I just gave them an all inclusive price that included utilities. Now I rent that home by the room and have moved out, so utilities are just put in the name of the tenant who will be there the longest and they split them with their other roommates.

There can obviously be some downsides to renting with all utilities included, like tenants not caring about their usage amount. I actually rented a house after college where they included utilities, but there was a monthly cap that if it was exceeded then we covered the difference.

Best of luck!

[Andrew McCartin]

@Daniel Haberkost @Sam Lewis 

@Max T. @Dylan H.

Thanks for all the helpful feedback, guys. Sounds like the consensus is to bake utilities into cost of rent, but I do also like the idea of Sam's method. 

I will try running an A/B test with both methods per Daniel's advice. Will be interesting to see which gets better results.