$175 more a month to pay gas,electric,etc - Posted by paul ut

Posted by David Krulac on March 09, 2002 at 18:48:22:

on duplexes with one furnace&water heater is to add one more of each. Use the existing furnace for one unit and add another. We’ve installed gas furnaces, cheapest to operate in cold NE, and have doen the work ourselves at a reasonable cost. Electric baseboard is the cheapest to install, but the most expensive to operate. We donot have electric heated units, because even with the tennats paying the heat bill high electric heat bills effect the bottom line as tennats will move if heat costs are too high.

David Krulac

$175 more a month to pay gas,electric,etc - Posted by paul ut

Posted by paul ut on March 07, 2002 at 01:22:38:

I have just completed my first rehab. Things have gone very well. I will hold this property as a rental. I received a call from a lady who is qualified for county housing. The county will pay me $1050 month if I pay the utilities. They will pay 1/2 of my asking deposit. She/they will sign a lease for 1 year. My asking rent is $875 with a $600 Deposit. At my asking rate I should have a cash flow of $110. a month. I have calculated in a budget for expenses,mngmt,taxes,ins, etc. I will manage the property. $875 is a good fair market rate. I have two concerns. I realy don’t want to pay utilities but as I understand it, if she doesn’t use all of the $175 in utilities, the difference is mine. (With my luck she can’t sleep at night unless all the lights are on, the water is running, and the furnace is on high. You know, its like reliving a vacation to Hawaii or something.) Would you pay utilities?? Any ideas how to keep utility costs in check? The second concern is that she has just recently got out of an abusive marriage. Are there any inherent problems I should be aware of. I am going into the county offices to get more information on their program. I will also call the gas,electric, and garbage/sewer for past charges. any suggestions would be helpful. Thanks Paul ut

fluctuating rates and excessive consumption - Posted by David Krulac

Posted by David Krulac on March 08, 2002 at 15:19:59:

utilities rates fluctuate. last year natural gas prices doubles. If you pay the utilities there is always the risk that the utilities will increase beyond your allowance. I hve heard also that when tenants pay the utility bill the consumption drops 20%.
If a faucet is dripping and you’re not paying for water, why would a tenant repair it. If the heat is included why pull down the storm windows? Why turn off the lights in unoccupied rooms?

David Krulac

Re: $175 more a month to pay gas,electric,etc - Posted by Anne-ND

Posted by Anne-ND on March 07, 2002 at 09:05:44:


If you have the opportunity, rent to someone who WILL pay the utilities. Find out whether you can rent to this tenant and have her pay the utilities. In MN, I’ve got a tenant on section 8 who pays the utilities, but gets reimbursed by the county up to a certain amount after she’s paid them, maybe you can arrange something like that. Don’t pay the utilities if you can avoid it.

Also- get the full security deposit. Even if the county won’t pay the full amount, if she can’t give you the rest, don’t rent to her. You’re running a business, you are responsible to provide safe shelter; the tenant is responsible for paying the security deposit, end of story.

Be sure to check this tenant out as thoroughly as you would any other potential tenant. Call previous landlords; check her credit (even if you know it’ll be bad); find out her employment situation. Get a copy of her driver’s license.

I rehab houses too, and it would break my heart to put in a tenant who abused the place. With proper screening you can greatly reduce the likelihood of a tenant abusing your house or you.

Good luck,


Re: $175 more a month to pay gas,electric,etc - Posted by Tim Jensen

Posted by Tim Jensen on March 07, 2002 at 07:22:40:


I would not pay utilties. Chances are your utility bills will be more like $300 a month.

Here is the senerio as I have seen it. Its free they leave every lite on in the house and the heat stays up at 85. Hey, I’m not payng for it ands its comfortable to walk around in shorts in the winter. Also, I didn’t like the way the landlord asked me to clean up the yard, I’ll show him.

You have to decide am I in the untility business or the landlord business?

The extra money is tempting, however rarely is it worth it.

Good Luck,

Re: $175 more a month to pay gas,electric,etc - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on March 07, 2002 at 06:10:25:


If it is permitted, you might want to offer her a cash rebate or a credit on her share of the rent each month based on savings of utilities below the $175/mo figure. Thus, if she saves you $50 dollars, for instance, you repay her $20 or $25 that month.

I’ve never done this. I either just pay the utilities or the renters pay the utilities. I usually prefer the latter, but in some areas the water and garbage service must be paid by the property owner – too many delinquent bills when paid by renters.

Good Investing*******Ron Starr***********

My is around 400.00 more a month - Posted by Mark

Posted by Mark on March 07, 2002 at 06:05:56:

I rehab a duplex last year. It has one furnace, one water heater, one elec box. etc… I have no choice but to pay for the utlities. I was chargeing 475 per unit. After 6 months my bills were running around $400.00. Ouch!!!. It is interesting when I drive around in the winter I see some houses with the windows open. Can see who is paying the bill. Anyway starting to ramble. I have my tennets on a month to month lease just in case I need to raise the rent or what ever. Last night in fact I had the Tennent sign a new lease with a few extras. I raised it to $500.00 a month. Washer and dryer use will be $30.00 a month. AC units will be $25.00 a month per unit. She was not happy but I have to pay my bills too. The upstairs tennet I will do the same once they reached 6 months.

In the future I will never buy a duplex or any piece of property where I have to pay for the utlilies. Hope this gives some insight.


Re: $175 more a month to pay gas,electric,etc - Posted by KC Questions

Posted by KC Questions on March 07, 2002 at 01:48:26:

How much will they pay you if she pays utilities? You might also want to call your utility companies so that they can give you an idea of what the average bill should be for that property. If you decide to pay them for her anyway, I would suggest that you inquire about a level payment plan for the utilites so you don’t get any big surprises.

good post! (nt) - Posted by Carey_PA

Posted by Carey_PA on March 07, 2002 at 14:07:53: