Should Utilities Be Included in Rent?

Utilities are a necessity in every home in the United States. We all utilize power, water, and sewer services as part of our daily lives. Most of us have some type of waste collection, even if our apartment or home doesn’t use natural gas.

In many cases, the monthly rent includes utilities like cable service and high-speed internet or wi-fi. In contrast, most people don’t consider these services as utilities; they are often included in rental homes when the landlord pays for all of the other utilities.

Not all utilities are included in the rental price of a property. Renters should find out whether or not their rental includes utilities and understand the benefits and drawbacks of this arrangement.

Does All Rental Property Include Utilities?

Whether or not utilities are included in rent depends on the circumstances. Most rent properties include some or all of the cost of certain utilities in the monthly rent, although this is quite rare.

When it comes to utilities, a rental property can fall into one of four categories:

1. There are no Utilities Included

It’s unusual for a renter to be responsible for all of their rental home’s utilities, but it does happen. It is difficult for tenants in many apartments to split charges like garbage pickup since it’s billed to the landlord on a single utility account.

2. The Rent Includes Some Utilities

Because services like sewer and garbage can’t always be isolated by tenants, these utilities are usually included in the rent. On the other hand, apartment buildings are likely to have individual electricity and water meters for each unit. Water is often a cheaper commodity and is sometimes easier to include in a tenant’s rent. Because of this, many landlords choose to cover the cost for their tenants.

3. Utilities are Included up to a Specified Price Limit

Rental arrangements that fall in this category include utilities in the rent, but only up to a specific sum. A landlord may own a three-plex apartment building where water is included in the rent, but the cap is $50 per month.

With this cap in place, the landlord can rest easy knowing that their tenants aren’t wasting water. If there’s an electricity cap in place, tenants will probably think twice about setting their air conditioners to 68 degrees during scorching summer months, especially if they are responsible for paying the difference when the bill exceeds the price cap.

4. All Utilities are included in the Rent

Apartment units that advertise “all bills paid” mean the tenant only has to write one check to the landlord each month because all utilities are paid out of their rent amount. This is more prevalent in apartment buildings with many units that share single electricity or water meter, such as a four-plex. In on-campus college apartments, utility bills are sometimes included in the monthly rent even if the housemates are on separate leases.

There is a significant difference between a gross lease and a net lease. A gross lease includes utilities, while a net lease does not.

Advantages of Renting a Place that Includes Utilities

It’s convenient to lease an apartment or house that includes all utilities. Utility bills will be paid on your behalf by the landlord. All you have to do is write one check each month for the rent amount, which should be the same amount each month.

Having to pay rent, energy, water, and other utility bills separately is time-consuming and can result in fluctuating monthly living expenses. Variable expenses are not an issue when utilities are covered. For example, if it’s hot outside, you don’t have to be concerned about the cost of running your air conditioner.

Many electric companies only charge a one-time fee to establish service connections, so you may not have to pay any connection fees when you move into a rental property. In addition, you will likely have ready access to the service once the connection is established. It’s the landlord’s responsibility to set up water and other services, which frees up part of your day. When utilities are included, you have the freedom to move in right away without having to first set up services with individual utility companies.

Drawbacks of Renting When Utilities Aren’t Included

When an apartment’s rent includes utility costs, it will generally be more expensive than comparable units where renters are responsible for their own utilities. A common misconception is that utilities are “free” if you live in an apartment that includes them. This is simply not true — landlords and property managers lump utility costs into the total monthly rent amount so they can, in turn, pay the expense.

Another disadvantage is that it may be more challenging to locate a rental property that includes the cost of utilities. This is more commonly found in older houses that have been divided into small apartments. Or additional units that have been built next to a primary residence.

Even with estimates and averages. It is impossible to predict how much electricity and water you will use on a monthly basis. Seasonal variations will influence your need for more or less service use, and your out-of-pocket expenses will fluctuate over the year as well.

FAQs

What does it mean to Include Utilities in Rent?

Including utilities in rent means that the landlord or property owner is responsible for paying the utility bills (such as water, electricity, gas, or internet) for the rental unit, and the cost of those utilities is factored into the monthly rent payment.

Is it Better to Rent with Bills Included?

It depends on your specific circumstances and needs. Renting with bills included can provide the convenience of not having to manage multiple bills and can make budgeting easier since the costs are fixed.

Why do Landlords do Bills Included?

Landlords may offer “bills included” options for several reasons, including convenience for tenants and themselves, attracting tenants, and easier budgeting.

What Bills do I have to Pay when Renting?

You will be responsible for paying for the utilities that you use, such as electricity, gas, water, and internet/cable. Other expenses may include renter’s insurance and any additional fees specified in your lease, such as parking or pet fees. It’s important to carefully review your lease agreement to understand what bills you are responsible for and to budget accordingly.

How do I Decide Whether to Include Utilities in my Rent or not?

Landlords should consider the pros and cons of both options and weigh the potential benefits and drawbacks. It may be helpful to speak with a local real estate agent or property management company to get a better understanding of the local market and what other landlords in the area are doing. Ultimately, landlords should make a decision based on what they believe is best for their property and their tenants.

Final Takeaways

Many tenants want to have their utilities included in their monthly rents. Still, there are benefits and downsides to consider with such an arrangement. A rental that includes utilities does not necessarily mean that it will be less expensive than a property that doesn’t include utilities. Consider the advantages and disadvantages of a rental with utilities included. Before deciding whether it is the right choice for you.