Importance of Managing Utilities via PropertyManager.com

While newer apartment complexes have separate utility meters for gas and electric, older properties often have a central meter for all utilities, with the end result being units marketed to tenants as ‘utilities included.’ An attractive prospect from a marketing standpoint, the fact remains that including utilities in your tenant’s rent can be a risky policy that may ultimately pay off for tenants while costing your management company thousands of dollars a year in inflated utility costs. While increasing rents to cover rising utility costs is an option, rents can only be raised at the end of a lease period, so the tenant abusing that heating or cooling system may have nearly a year of opportunity to abuse the system until you can raise the rent.

Fluctuating utility costs also contribute to the difficulty in determining just how much to add to the market cost of each unit in order to cover your expenses accordingly. Low-ball this amount and you’ll end up paying…and paying. Water bills are particularly hard, since the majority of apartment complexes have one central billing meter. But that is beginning to change due to certain areas experiencing unprecedented drought. As a result of the drought, many cities and municipalities are instituting water restrictions that must be followed. Water conservation programs are also active in many areas, but having a central meter for all billing makes it difficult for apartment managers to truly have any control over water usage. By passing those costs directly onto tenants, you’ll be placing the water conservation effort squarely where it belongs, into the hands of your tenants.

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