All-inclusive rentals are attractive and convenient for tenants; therefore, a great feature to advertise in off-campus housing rentals!
However, utility costs are rising and can be expensive when paired with high consumption times and rates. For landlords who choose the all-inclusive option, we’ve provided some valuable tips to keep costs low and profit margins high.
1. Utility Caps
Unfortunately, some tenants aren’t mindful of utility consumption; especially if they aren’t financially responsible or simply aren’t aware of how expensive utilities can be. It’s a frustrating experience for landlords to receive abnormally high utility bills. For this reason, some landlords have implemented a utility cap in their lease agreements.
A utility cap essentially specifies the limits of ‘all-inclusive’. If tenants exceed the agreed upon cap rates, they are responsible for paying the difference. A utility cap is a specific dollar value assigned for a single billing period. It is written directly into the lease agreement for tenants to sign and avoids a dispute regarding utility overages. Utility caps assist tenants in being more cost-conscious, especially after having to pay the utility differences.
2. Prohibiting Use of Non-Essential, High Energy Consumption Appliances
Some tenants will bring non-energy efficient appliances, such as space heaters or portable air conditioners, into rental units. This can result in significantly higher utility bills for the landlord, if an all-inclusive lease agreement was signed without provisions prohibiting the use of these appliances.
A common occurrence is where multiple tenants have different heat preferences, with at least one tenant finding it too cold in the winter months. A tenant’s solution may be to use a portable space heater in the bedroom, while unaware of the costs of running it for an extended period. In this situation, a landlord may add a provision to the lease agreement prohibiting the use of space heaters.
Landlords may also prohibit the use of similar appliances like window air-conditioning units, if the house is equipped with central air or another cooling system.
3. Minor Household Energy-Efficient Upgrades
Landlords have many resources available to them for savings over time. Below are some easy and cost-efficient upgrades to consider:
Weather-stripping for Doors and Windows: This is a very easy fix for drafty doors and windows affecting heating and cooling bills. Weather-stripping seals air leaks, especially in homes with older windows or doors. There are many useful online guides on weather-stripping and the types to use.
LED Lighting: LED lights can help save hundreds of dollars over a few years time. Replacing current lights with LED lights is a great investment and takes little-to-no-time.
Programmable and Non-Tamper Thermostats: Changing the temperature of a rental unit by a few degrees Fahrenheit can have a substantial impact on heating and cooling bills. Programmable and non-tamper thermostats are ideal for rental units to help mitigate costs and moderate the temperature.
Regularly Change the Furnace Filter: It’s easy to forget to change the furnace filter, but this small mistake can make it more difficult for the HVAC system to run efficiently. While the lifespan of furnace filters vary, according to different makes and models, it’s fairly common to hear most should be changed every 90 days.
Install Low Flow Fixtures and Aerators: To cut down on water consumption, landlords can install various low flow fixtures at reasonable cost. They can result in water savings up to 60%.
4. Coin-Operated Laundry Machines or Designated Laundry Times
Rental units equipped with washer and dryer machines generally see higher energy consumption, especially with multiple tenants. For this reason, many all-inclusive landlords resort to one of the following options:
Coin-Operated Laundry: This is a highly favored option in student housing. Each load in the washer and dryer will cost a set amount. It’s relatively inexpensive to implement, by either purchasing second-hand coin-operated machines or getting a coin system installed on existing appliances.
Designated Laundry Times: Some landlords grant free laundry usage. But to decrease their costs, landlords may designate specific timeframes to use the appliances, in order to limit frequency, as well as take advantage of off-peak electricity hours.
5. Replace Old Appliances:
Although this option can be the most expensive upfront, in some cases, the savings of replacing old appliances can pay for themselves within a few years.
Not all old appliance replacements will translate into savings though. The main culprits often are old water heaters, refrigerators and washing machines. Old toilets with bowls that hold more water than the newer models should be replaced to reduce water consumption.
SEE ALSO: What Exactly is Normal Wear & Tear on a Rental Property?
The Places4Students.com Team