Utility costs for 1150 sq ft house with basement suite

[Dan Golby]

I recently bought a brand new 1150 square foot house with a basement suite. It does not have separate metering so I will have to pay the utilities. Just wondering how much I should estimate for the cost of utilities? With the price of electricity fluctuating I think it might be a tough guess...



It has high efficiency forced air furnace for upstairs and in-floor heat for the basement.



Thanks in advance,

Dan

 

[invst4profit]

Difficult to answer. However:



The rent you will be able to receive will be driven by the market more than anything else with some variations.

Are you planning to live in one of the units yourself ? If not your best option may be to have the main house tenant put the utilities in there name and the cellar dweller would reimburse them 40%. Or you put the utilities in your name and the lease is plus utilities divided again 60/40.

This second option may be best as it eliminates disagreements between tenants but at the same time guarantees (sort of) that tenants pay 100% of utilities.



It is always best to not rent inclusive as many tenants are irresponsible in regards to expenses they are not responsible for.



Search the rental market in your area and see what rents plus utilities would be.

 

[Thomas Beyer]

[quote user=invst4profit]your best option may be to have the main house tenant put the utilities in there name and the cellar dweller would reimburse them 40%. Or you put the utilities in your name and the lease is plus utilities divided again 60/40.

This second option may be best as it eliminates disagreements between tenants but at the same time guarantees (sort of) that tenants pay 100% of utilities.
This makes total sense, as water+ewer+garbage+gas + electricity will run you between $2500 and $3500 a year, with spikes well over $400/month in the winter, depending on location, insulation and tenant's idea what "comfortably warm" means.



Plus, unlike apartment buildings where utilities are usually included, it is common in houses that they are on top.



Have a lease that uses one of Brett's suggested options, and if you pay for it, add $300/month ($180 up and $120 down) as an estimate, payable every month to you as part of rent, adjusted annually (say every summer once all the winter bills are paid).



There is also water and garbage, which in many communities (but not all) is added to property taxes, and in some others billed separately, via separate bills or in conjunction with gas or electricity bills.



Find out what the process is in that particular town.



Also, please be aware that in some (but not all) communities the town has the right to bill owner if the tenant defaults on utilities !

 

[JBagorio]

Hi Dan-the-man,

In Calgary a unit like this varies util price from $200 to $400 per month, but I would suggest not to take on any utilities for tenants. It is better to give them the responsibility. If the bills are in their names they will learn to care and appreciate the value of conserving energy to save money. What I normally do is a percentage split of 60 up and 40 down or 65/45 or 50/50 depending on the size and the number of parties involved? I normally have the upper unit take the gas and the lower unit take the electric (inc. water and waste disposal) or vice versa.

 

[Dan Golby]

Thanks for the replies!

I really like the idea of a 60/40 split, or something close to that.

There are similar houses renting in town for about $1700 up and $1300 down (utilities included) for a total income of $3000. I expect my total non-utilities costs (mortgage/insurance/taxes/maintenance) to be no more than $1750/month so I had quite a bit of room for utility expenses and still have a pretty good positive cash flow in my opinion. The problem with that is the first time I drove by on a cool day and saw a window open or all the lights on it would drive me up the wall. If I lower rents slightly and split the utilities I have no worries and will have consistent cash flow as well.

Thanks again!

Dan

 

[Sherilynn]

For all of my suited homes I keep the utilities in my name and have a utilities agreement as a schedule in the lease. I don't name a specific percentage share in the agreement, and I specify that it: "shall be reviewed and adjusted as required or at the end of the tenancy. For example, should utility prices be increased causing the average utility bill to rise, the utilities contribution paid by the tenant would be adjusted accordingly."



Using the above statement, I also make adjustments for tenants with different usage. For example, I had a tenant from Ethiopia that set the thermostat at 27 degrees. I adjusted the split on the gas bill to accommodate.



If you name a split in your agreement, then you are tied to that split even if the other suite is vacant. And I don't want to pay 60% of the lower suite's electric bill if the upper suite is vacant for a month.