How to manage utility bills while listing rental property

[Jin Mook Choi]

Hi everyone,

I am new to out of state investor and have a quick question hope to have some clarity.

Current investment property is managed by a property management and still in process of listing. During this period, how should I handle the utilities bills? Would property management take care of those bills and forward the payment to me? Or do I need to opt in under my name while property management is listing the property?

Thank you in advance!

[Nathan Miller]

Ideally your property management will take care of the bills, but not all managers offer this.  Some want the owner to handle the utility bills, which isn't ideal because the owner doesn't have insight into exactly when the tenants move in/out.  The important part is making sure when a tenant is placed that the utility is changed into their name on the same day, otherwise you end up paying the tenant's utility bill.

[Bob Stevens]

Quote from @Jin Mook Choi:

Hi everyone,

I am new to out of state investor and have a quick question hope to have some clarity.

Current investment property is managed by a property management and still in process of listing. During this period, how should I handle the utilities bills? Would property management take care of those bills and forward the payment to me? Or do I need to opt in under my name while property management is listing the property?

Thank you in advance!T

The utilities are in your name the bill comes to your house, pay them. Not really sure what else to say, do not over think it . PM is not your personal secretary :) 

Good luck 

[Bob Stevens]

Quote from @Nathan Miller:

Ideally your property management will take care of the bills, but not all managers offer this.  Some want the owner to handle the utility bills, which isn't ideal because the owner doesn't have insight into exactly when the tenants move in/out.  The important part is making sure when a tenant is placed that the utility is changed into their name on the same day, otherwise you end up paying the tenant's utility bill.

 The owner will know exactly when the tenant moves in as per the PM co. Also, the PM co will or better have the tenants' put utilities in their name PRIOR to move in 

[Nathan Gesner]

As a PM, I offer to handle the bills for the owner. I receive them, pay them, and then bill back to the owner. My vacancies are pretty short and utility bills are typically a month behind actual use. By the time a bill arrives, I typically have a tenant in place and rent money on hand. I deduct the utility charge from the rent income and provide owner with a copy of the bill so they see what I paid for.

[Eliott Elias]

Either or works. They are getting paid at the end of the day.

[Nathan Miller]

Quote from @Bob Stevens:

The PM has all the information, they know the exact dates of move in/move out and they know it as it happens.  That gives them the ability to manage utility bills far better than the owner who is a step removed.  It's normal for PM to handle both income and expenses for a property and utility bills are indeed a regular expense.  They shouldn't do it for free, but there are typical fees for handling these.  Also, if it's an extended vacancy, that could be an exception.

As we can see, different managers do things differently.  If you hire a PM, get one that will do what you need them to.  Some handle utilities, some may not.  I need them to handle the utility bills because I don't want to be shuffling and pro-rating utility bills for 30 some properties. :)

[Michael Smythe]

Depends on what your management agreement states.

We require the utility bills to be in the name of the property owner, but we get the bills and pay them - assuming the owner has funds in their portfolio with us.

[Theresa Harris]

Your PM should handle these and bill you for them.  When you have a turnover, same thing. They don't always do this (speaking from experience where they forgot), so double check that they did it.  Most utility companies if you tell them you are the owner and it is a rental, won't ask for a deposit to set up a new landlord account.

[Jin Mook Choi]

thank you for all the valuable inputs!!

[Richard F.]

Aloha,

This might vary depending on local law and how the Utility company works, but we typically schedule "interim" service with the utility companies to start the day after outgoing Tenant stops their service. This way there is no "down" time, and additional cleaning, or repair work, will not be delayed due to no power. We simply schedule that interim service to stop the day, or day after, the incoming Tenant Rental Agreement starts. It is up to the Tenant to actually start the service in their name, but lights will go out in a few days if they do not...

[Tracy Streich]

@Jin Mook Choi  Every PM does it differently.   We ask owners to put them in their name until it is rented.  We then notify of the move in date and owner schedules to turn them off.  This is on the initial onboard only.  On turn over the management company handles the utilities.   The main reason we do this is we don't have funds to pay for the utility bills until we have collected rent unless the owner makes a contribution.  We have found Most would rather turn it on themselves. 

[Melissa Nash]

Its nice when the PM does this for you, but they don't always. And they will charge a fee for it. Its not that hard to set up & pay yourself. But the ease of a pm doing it is nice. I have done this just so I don't have to stress about the timing and making sure the tenant turns into their name. At least the PM tracks that for you. Best of luck!