Rent including elec bills ? have you done that ?

[whitehope06]

Hi all,

I have a question. I've just sent my pm an email to increase the rent for our IP from $410 to $425 (after one year contract which will be end on 30 June) and I've got her reply that the tenant offers to increase to $450 per week but that would be including electricity bill, and he said usually it's about $200 per quarter !!!

so what you guys think ? should I say yes ? should I make some conditions ? is it a good deal or no ?

please share your thought.

thanks
whitehope06

 

[wylie]

I wouldn't ever become liable for any of our tenants' electricity bills. What happens if the account is really high. You will lose money.

It seems a strange request from the tenant. I would decline.

 

[Ed Barton]

Hi all,

I have a question. I've just sent my pm an email to increase the rent for our IP from $410 to $425 (after one year contract which will be end on 30 June) and I've got her reply that the tenant offers to increase to $450 per week but that would be including electricity bill, and he said usually it's about $200 per quarter !!!

so what you guys think ? should I say yes ? should I make some conditions ? is it a good deal or no ?

please share your thought.

thanks
whitehope06

sounds like they use a lot of power. 425 pw no power, 475pw with power.

if you include power you have an unlimited liability. they could, and might run the ac and dryer 24 7.

let them look after their own power...

 

[weg]

I thought the only people with power bills of $200 nowadays, were pensioners that carefully monitored what they used .

I'd say the tenant has noticed the price of power skyrocketing and has come up with this idea as a way of putting a cap on her bill.

In other words, the LL has to worry if she goes over that amount.

 

[kathryn d]

Having heat and lights included in the rent is fairly common in Canada.It can also bankrupt a LL.
We are very careful when we offer heat and lights in our properties. We make them sign a contract stating they will not have the heat on, and the windows open. Sounds like common sense, but these tenants all say they want "fresh air". I haven't seen a tenant yet have their window open who is paying for the heat themselves.
We have a property where we give the option of including electricty. We also have it about double the price of the actual cost. We tell them it is not a cheap option, just an option. Some still owe on a electric bill and cannot get a connection until paid.

We bought a house a few years ago. We bought with vacant possession because the current lease was Rent which included electricty. The tenant would pay for the heat, which was by an oil furnace. The LL said yes, but I doubted she realised these tenants would start using electric heaters all over the house. We counted 10 when we inspected the house.

So no..don't do it.
If you do, allow double for the electric bill to reflect in the rent.

 

[BuildingBlocks]

They are offering $100 extra per month and you have increased costs of potentially $66 per month, if their figures are correct.

Is it worth taking on this risk for $33 month when you can't accurately measure the downside?

If I go to an all you can eat restaurant I always eat more to get my money's worth.

 

[whitehope06]

thank you all for your input. I just asked my pm to provide the last 4 bills (would be the whole last year ) so I can decide. The tenant said if I don't go with this offer he will move out , it means he woudn't accept the increas of $15 per week.

I think most of you are right, I don't know what the usage will be !!!

 

[KidsInheritance]

If the rent you are wishing to move to is not excessive & is in line with the market, I would be inclined to call the tenants bluff on the threat to move out.
If he moves out, get another tenant who will hold their own electricity account at market rent.
Problem solved.

 

[BuildingBlocks]

Threatening to move out over you not including electricity in his rent, when they claim that they will be paying you more in increased rent than the outgoing bills?

Something sounds dodgy. If the area has low vacancies then call their bluff, either way you need to get your rent to stay in line with the market

 

[Lil Skater]

Maybe they're thinking of setting up some kind of testing laboratory, or add some plants throughout the house

 

[russellpeter]

have you considered getting soler?

 

[charlieandkath]

Is the house in Sydney?? 410 to 425 is only a 3.7% increase. I would be asking the rent to go to 450 anyway without electricity. Have you only been lifting the rent by this much each year? If so you could be a long way behind on the rent. Might be worth invetigating other property managers. Just some thoughts.

 

[RumpledElf]

$200 a quarter? I wish. Ours vary from $400-900 a quarter. All electric house in a cold climate.

If I was renting with electricity included for $15 a week I'd jump at that in a heartbeat! We could set the heater to 25 degrees instead of 16 and let someone else pick up the $1500 a quarter tab for doing that!

Reallyreallyreally looking forward to a lightweight contruction (ie, NOT that crazy high thermal mass stone that just keeps the cold in) house with a north-facing living area, and the option for GAS heating. Stone houses only work if you have a wood fire burning constantly, which heats up the entire mass of the chimney breast and radiates heat for hours. And some idiot concreted up the fireplace here to be 5cm smaller than the smallest wood fire on the market.

 

[whitehope06]

What you think about our unit ? this is details ;

A unit on 2nd level , in Shutherland Shire, 2 bed, 2 bath, 2 balacony, 1 garage. 5 mins from train station, 2 mins from a big shopping centre, so I think $425 is faire price. Last year was $410 , and I’m not worried if the tenant wants to leave , we can find another one easily .

CharliandKath , I think you are right. We’re thinking of changing our PM,she wasn’t so keen to increase the rent at all !!!!

 

[jaycee]

I thought the only people with power bills of $200 nowadays, were pensioners that carefully monitored what they used .

I'd say the tenant has noticed the price of power skyrocketing and has come up with this idea as a way of putting a cap on her bill.

In other words, the LL has to worry if she goes over that amount.

Not eveyone is in your istuation Weg, my pooiwer bills are under $200/2 months.....

Seriously, the first thing that came to my mind is "why does evyrone want to complicate things ?"

Just pay your bills and get on with life.... what's the landlord got to do wtih power bills, or grocery bills or anything else ?

Why "blackmail" a landlord with "I'll move out uneless you fo this" when your suggestion is not common and sounds wierd to start with

 

[daniellee]

Hi Whitehope06,

Adding electricity to the rent is quite common among student rentals in Melbourne. When we first arrived in 2004, we rented a room for $165 inclusive of electricity, water and internet. Everyone in the house was on the same 'plan'.

Ended up having housemates who left the central heating on all the time while insisting that they should be able to wear shorts and singlets in the midst of winter. Then it got too stuffy and they would open the window and continue leaving the central heating on.

Had housemates who took long showers, etc. Hey, most of them were in in their late teens attending Uni, so it came with the territory.

You have to charge for the worst case scenario, because most of the time that is how it is. Once the mindset sets in that it is a free for all, you can watch the bills spike!

 

[kathryn d]

Ended up having housemates who left the central heating on all the time while insisting that they should be able to wear shorts and singlets in the midst of winter. Then it got too stuffy and they would open the window and continue leaving the central heating on.

We had to order them from the USA directly, but for some of our units we have installed "thermostat controls" which are hidden inside the wall, behind a conventional thermostat. The tenant can turn down the heat, but it does not go above a set temperature. The themostat inside the wall come in different temperatures, but we are mandated to provide at least to 21 cel..so that is the one we bought.
Other properties have programmable thermostats that have a "lock out " option for the LL. It cannot be programmed at a higher temperature, without a password code. Since they are mostly student accommodation, the temperature is decreased when they should be in class..and when they should be sleeping.
Heat is one of our largest expenses, and we are constantly looking for ways of saving money.

All of the tenants who have heat included, sign an agreement they agree to vacate within 5 days if they open a window during the heating season (as defined by us) and to pay for the excess heat used during this time.
We also keep a close eye on them, personally and via our supers.

 

[orbitor]

hah, ridiculous. tell them to pay for their own electricity.

have you seen how crazy people go for free stuff? yeah.

 

[bradcon]

Maybe they're thinking of setting up some kind of testing laboratory, or add some plants throughout the house

Agreed. Why ONLY electricity? Why not water and gas (if applicable) as well. Alarm bells shoudl be ringing here.

I also agree with the poster who mentioned solar. I have often wondered if i owned an IP if i would get the roof covered with panels and add 'traditional' electricity costs to the rent for a bit of a fill up to the old bank balance!!!

 

[Macca]

Well this is an easy one, your answer should simply be NO !!

Put your rent up to the current market value when they leave, good way to get extra rent.

According to the media the Sydney market is desperate for rental stock at the moment, your current tenant is trying to bluff you, just say no and hope they leave so you can get a new tenant at market rent.