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09/17/2008 19:50:21
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Subject: Charging for utilities
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Greg Martin
Joined: 09/16/2008 18:48:36
Messages: 4
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Over the past several months there has been a dramatic change is how properties are charging for utilities. In the past ,at least in the Chicago area , heat water cooling were included in the rent. With the current over supply of housing(much of it caused by the market for condos falling apart)owners are desperate for income. It appears that charging the resident for the utilities is much easier to do than raising the rent the same amount. The added benefit is that if you bill for actual expenses the resident feels like they can make a difference(ie turning back the heat). This new cost,along with free rental months, has dramatically changed the fabric of market studies. Martket rent is no longer what the rent the tenant is paying. The rent is the amount the tenant has to pay each month(not to be confused with plus and minus adjustments based on emenities)has changed in definition. We have modified our market studies to show street rent. Basically we take the market rate, deduct the concession in free rent they receive, and add back in any utilities(not basic electric) they pay. This is the amount we show on our pro formas.
This message was edited 1 time. Last update was at 10/11/2008 12:03:00
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09/24/2008 08:47:46
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Subject: Re:charging for utilities
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Eileen Yesko
Joined: 09/18/2008 11:48:08
Messages: 3
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I will say that even in affordable housing with new development HUD and other housing agencies are looking for properties to be individually metered so residents pay at least some utilities. HUD funding has been severely cut back and this is a way to control the rental subsidies needed at a property.
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09/26/2008 09:28:59
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Subject: Re:charging for utilities
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Christopher Mellen
Joined: 09/16/2008 11:19:56
Messages: 46
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Having Residents, even in Government Housing, pay for utilities is a means of recognizing our obligation to be more energy efficient.
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09/26/2008 09:29:59
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Subject: Re:charging for utilities
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Christopher Mellen
Joined: 09/16/2008 11:19:56
Messages: 46
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Having Residents, even in Government Housing, pay for utilities is a means of recognizing our obligation to be more energy efficient.
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09/29/2008 18:13:10
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Subject: Re:charging for utilities
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Vicki Caruso
Joined: 09/29/2008 18:05:11
Messages: 2
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The Tucson market (Tucson is in Arizona--smile) charges for water up & beyond the normal monthly rental rate. We charge according to the unit size--1 bedrooms $15.00 per month, 2 bedrooms one bath are $20.00, etc. It does assist with residents conserving water.
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09/29/2008 18:14:26
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Subject: Re:charging for utilities
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Vicki Caruso
Joined: 09/29/2008 18:05:11
Messages: 2
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 The Tucson market (Tucson is in Arizona--smile) charges for water up & beyond the normal monthly rental rate. We charge according to the unit size--1 bedrooms $15.00 per month, 2 bedrooms one bath are $20.00, etc. It does assist with residents conserving water.
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09/30/2008 14:43:55
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Subject: Re:charging for utilities
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Eric Luskin
Joined: 09/30/2008 14:27:45
Messages: 2
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Within student housing, a rate that includes all-in amenities - furniture, Internet, television service and all utilities - has been standard for years. This is changing quickly, however, especially in off-campus properties targeting students. It is becoming common to either meter separately and charge at least some utilities based on consumption, or quote a flat rate for rent plus an additional monthly fee for an amenity package. When charging a flate rate for amenities (including utilities), there is often a provision to charge all residents within a unit extra if their consumption runs more than 10% over the building average for their unit type within any billing period.
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10/03/2008 09:51:23
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Subject: Re:charging for utilities
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Mary Ann Sipos
Joined: 10/03/2008 08:54:45
Messages: 26
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At a recent IREM meeting here in Pittsburgh, PA--industry leaders shared that they are not raising commercial rents for tenants, but are beginning to pass on the utility costs instead.
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04/18/2009 15:04:49
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Subject: Re:Charging for utilities
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Diane Rice
Joined: 04/05/2009 20:56:27
Messages: 27
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We certainly understand the need for tenants to pay for what they use. In the case of the owners paying the utilities there will always be abuse. Tenants should take their own responsibility. I recently talked with a Chicago tenant who saw the reduction in her light bill by at least 30% from just unplugging what was not in use. A good incentive for going green!
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05/12/2009 20:40:37
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Subject: Re:Charging for utilities
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Debra Coles
Joined: 03/19/2009 18:55:32
Messages: 5
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We charge our residents in the PHA a portion of their bill for Utilities, and beginning this summer we will begin charging them a separate bill for the water meter as well. Some residents have gotton so that they think the entire bill is on the PHA, not realizing that we already pay a portion of it. The PHA is beginning to make the residents more responsible, esp with the water bill. Last Summer a lot of residents invested in small rubber pools, thus using water, and washing their cars in front of their units. I think with this new bill they will be more hesitant to do so.
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06/21/2009 10:36:59
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Subject: Re:Charging for utilities
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Wes Stevens
Joined: 06/21/2009 10:31:02
Messages: 1
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I agree that from an energy usage standpoint, billing utilities to the resident is the most effective way to lower overall usage. If the resident is responsible for paying their own electric bill, they are much more inclined to monitor and limit energy usage, which benefits us all in the long run. Offering energy conservation classes for residents has actual gotten good feedback at my property, as residents are always looking for new ways to save money!
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06/23/2009 15:21:55
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Subject: Re:Charging for utilities
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Lynn Moore
Joined: 06/23/2009 15:18:38
Messages: 2
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I agree with Wes, but the problem I have is 98% of all the units I manage there is only one boiler so heat and HW must be included and I have some properties that even electric must be included. It would be great to separate the utilities but I don't see it happening anytime soon. Any suggestion I live in Maine.
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06/23/2009 16:57:52
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Subject: Re:charging for utilities
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Bryan Eidel
Joined: 06/23/2009 16:28:41
Messages: 1
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]Within student housing, a rate that includes all-in amenities - furniture, Internet, television service and all utilities - has been standard for years. This is changing quickly, however, especially in off-campus properties targeting students. It is becoming common to either meter separately and charge at least some utilities based on consumption, or quote a flat rate for rent plus an additional monthly fee for an amenity package. When charging a flate rate for amenities (including utilities), there is often a provision to charge all residents within a unit extra if their consumption runs more than 10% over the building average for their unit type within any billing period. [/quote wrote:
I would love to be able to charge for utilites, but unfortunately that is the main selling poing that separates my property from the competition. It is an especially difficult pill to swallow in the summer time when I walk into units and find the windows open with the A/C on full blast. Also, most students have lost the ability(or never had) to turn of the lights, TV, stereo when they are not home.
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08/10/2009 09:45:05
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Subject: Re:Charging for utilities
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Christopher Mellen
Joined: 09/16/2008 11:19:56
Messages: 46
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Another consideration in converting a property to have the tenants paying their own utilities is Market cycle. Although, we reduced our rents after a recent utility conversion to be very market competitive, we still had a mass moveout. The market was just too soft to over compensate for it. There will always be tenants who will move when lease terms change and in this market of give aways we were not prepared as we started planning the utility conversion when the market was alot better. Chalk this one up to a lesson learned!
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11/15/2009 11:10:34
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Subject: Re:Charging for utilities
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James Edmonds
Joined: 11/12/2009 16:05:53
Messages: 2
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Webquest
Charging for Utilities
I agree. In the past, basic utilities such as water/sewer usage, hot water, and even electricity were included in the effective rent. Many tenants saw this as an advantage but due to economic changes and environmental concerns more landlords and property managers now than ever are billing back these utilities through 3rd party companies that can meter the usage properly. This creates many advantages such as controlling costs for the property managers and also causes the tenants to use less because they now have to pay for it. In Winston-Salem, NC I have seen an increase in property management companies’ not including hot water and water/sewer cost in the effective rent and I think that it is more cost effective to have the tenants pay for their share of the usage; i.e. it just makes sense business speaking.
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