Utility bills may not be the most exciting aspect of adult life, but they are essential for anyone renting a home. Taking many shapes and forms, they can add up to take a significant chunk out of a renter’s monthly budget.
This is why, when it comes to effectively managing finances, understanding utility costs is essential. Point2Homes put together a guide on the various utilities you’re likely to come across when renting, what renters typically pay separately for, and how to navigate utilities when renting.
What Are Utilities?
Utilities are the essential services that ensure a home remains comfortable and functions as it was designed. Common utilities include:
- Water: essential for drinking, cleaning, and sanitation
- Electricity: powers appliances, lighting, and electronics
- Gas: used for heating and cooking
- Waste disposal: covers trash, recycling, and sewage
- Internet (sometimes with TV and phone services): essential for connectivity and communication
Utility usage is usually calculated monthly by each different service provider. And the amount you use a particular service for dictates how much you’ll be expected to pay. Each service provider calculates charges separately, meaning you may receive multiple bills. However, bundled services, such as internet, phone, and TV, are also common.
What Do Utility Bills Include?
As previously mentioned, different service providers will issue individual bills, so you can expect to receive separate bills for water, gas, electricity, internet, etc. In some cases, one provider might offer more than one service.
Your utility bills may also provide details as to how your use of the service has changed over the previous few months. This can help identify patterns and see where you’re spending more or making savings.
Typically, utility bills provide a breakdown of usage and cost, often including:
- Usage details: how much water, gas, or electricity was consumed during the billing period
- Cost breakdown: the price per unit and total charges
- Payment details: due date, payment methods, and account information
Which Utilities Are Typically Included in Rent?
Some landlords will include certain utilities in the monthly rent amount. In these cases, the landlord manages the accounts and folds the costs into your rent. Some of the most common utilities that are rolled into your rent are basic services such as:
- Water
- Heating
- Waste removal (trash, sewage, recycling, etc.)
Meanwhile, certain utilities are rarely included and often require you to set up and manage accounts with providers. The following utilities aren’t so commonly included in the rent:
- Gas
- Electricity
- Internet, phone, TV services
- Air conditioning (where applicable)
If your rent doesn’t cover the above utilities, you’ll need to budget for them separately. In this case, you’ll be required to research different providers and have them set up. You’ll receive utility bills for these, alongside your rent each month.
How to Know Which Utilities Are Included in the Rent
Check the lease agreement to see which utilities are included and which ones you’ll need to arrange for yourself.
There should be a section detailing which, if any, utilities are included, as well as any limits or conditions. You can also speak to the landlord or real estate agent, but the lease agreement is the only legally binding source of information. Be sure to review it carefully, paying attention to any fine print about additional fees or limitations.
Is Renting a Utilities-included Home a Good Idea?
Some homes for rent will be listed as “utilities-included.” This generally means that all or a significant number of the utilities are included in the price of the rent. As such, there won’t be additional bills to take care of each month — just one all-inclusive rent payment.
This arrangement may make it easier to stay on top of everything. But, while there are several benefits, there are some downsides too. Before deciding if it’s the right choice, it’s worth going over the pros and cons.
Benefits of Utilities-included Rentals
There are numerous benefits to having all of your utilities included in your monthly rent payment:
- Convenience: no need to set up accounts, manage multiple payments, contact service providers, shop around for the best deals, or arrange installations, as this has all been taken care of already. Not only is that very convenient, but it also saves you a lot of time and effort.
- Easier to budget: with just one consistent payment, you’ll avoid seasonal fluctuations and know exactly how much you’ll be spending every month. This makes it easy to predict your budget and avoid nasty surprises if utility prices spike.
- Easier to split costs: if you share your home with other renters, it’s easier to split a single rent payment than dividing individual bills.
- Less stress: this arrangement is suitable for avoiding conflict if one roommate seems to use more of one utility than everyone else. You also don’t need to worry about spending too much time in the shower.
Disadvantages of Utilities-included Rentals
The utilities-included option isn’t always the best choice for everyone. Here are a few downsides to consider:
- Higher rent: with utilities included, the rent is typically higher than the market rate to cover costs. You may also end up paying a lot more for utilities you barely use.
- Less energy efficient: fixed costs may lead to overconsumption since there’s no direct financial incentive to conserve. As you won’t be paying the bills directly, it’s difficult to track your usage, which can often result in consuming more than you actually need.
- Lack of choice: You can’t choose providers, which may mean paying more for less reliable service.
- Hidden limits or potential hidden costs: some leases impose usage caps, leading to additional charges if you exceed them. Be sure to check the lease agreement thoroughly to see if this is the case.
It’s also worth bearing in mind that you may be required to pay set-up and installation fees for certain utilities as well. Additionally, in various jurisdictions, landlords are required to disclose which utilities are included in rent and provide written notice of any usage caps or additional fees.
Whether you opt for a utilities-included rental or handle the bills yourself, it’s always a good idea to consult the local housing authority or tenant rights organization for specific legal protection. By knowing what’s included in your rent and reviewing your lease agreement, you can avoid unexpected costs, make informed decisions, and manage your rental budget effectively.
Featured image: Andrii Yalanskyi/Shutterstock.com
