Landlord's Learning Center- Who Pays What Utilities? Keeping up With Current Rental Trends

Ok, you've found a good tenant with the credit, income and history requirements all met. Now its time to sit down and enter into a lease agreement. As Sacramento area property managers, a common question we get from both tenants and landlords is regarding the utilities. Who pays for what?

In the greater Sacramento area, is it customary for tenants to pay for gas electricity and phone. However, most landlords pay for the water, sewer and garbage. This custom can very from county to county. In some areas, utility companies for water will acknowledge a tenant as a responsible party, but most utility companies for water, sewer and garbage will only recognize the owner of the property. Even if a tenant signs a lease stating that they will pay these costs, if there ever arose a problem concerning non-payment of a utility bill, the owner could face a lien against his/her property.

At ICPM, we recommend getting to know the local trends in your rental area. Use free resources at your disposal to find out what your competitors are charging on their rental units. Craigslist can be a great tool for landlords to stay in the loop on current market rents, etc.

It also helps to know if your rental property has or will soon have metered water. If your water is metered, you can at least protect yourself by having the lease contain a water "cap", stating that owner will pay for water up to a certain monthly amount, but that any amount exceeding this cap would require the tenant to reimburse the landlord for the difference.

A final note on utilities- Disclosure is key. Nothing sours an initial tenancy quite like sitting down to sign paperwork and finding out for the first time that there will be extra charges for water, sewer and/or garbage due. Any additional charges or deposits due (utilities, additional deposits for keys, animals, etc.) should be clearly outlined in advance of accepting any good faith funds from the tenant. This is an area where quality property management can help, as we are accustomed to negotiating contracts on a daily basis.

Having all parties understand what is expected up front will go a long way towards insuring a solid foundation to what will hopefully be a long term quality landlord/tenant relationship.

Investors Choice Property Management (ICPM) manages 100 single-family units with the care and diligence our Landlord clients deserve, in a manner that has them referring their friends, co-workers and family members. With over 16 years professional property management experience, our business is 95% word-of-mouth referral, we do NO Sales, and pay among the highest referral fees in the industry for management accounts. Visit our website at www.investorschoicepm.com today for more details, and find out what we mean when we say:

“Experience Property Management the Way it Should Be.”