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I'm interested in how people work/word their fair use gas/electricity policies.
Having looked at a lot of worked examples of HMO costs, they continue to surprise me, in that so little is budgeted for utilities.
Are HMO's truly 'bills included' or do landlords cover only a small proportion of gas and electricity costs in reality?
I suspect that it is not possible to control behavior through instructions on how and when tenants should/not use utilities including electric heaters.
I believe the solution is likely to be financially based, but would like to hear from those who have done this.
Either 1) paying a set amount for gas and electric per month as the landlord to the supplier, any over charge being passed on to tenants
2) tenants paying for gas and electric and me as landlord repaying them a set amount
3) meter system where landlord pre-pays a set amount per period and once this has run out, tenants responsible?
All those solutions tend to mean going back to the Rigsby days of individual meters in each room - which would incentivise tenants to be a tad more frugal - but complex if there is say only 1 gas boiler in the property.
The clear issue is that if LL sets rent too high so as to cater for higher bills - that dissuades tenants from applying - though I have seen on other PT threads LLs use a fair use policy in TA - any excess payable by tenant. Which flags that HMOs need more nurse maiding than a single let.
One small consolation is the bills are tax deductible.
obviously the rent is higher to cover utilities.
I set the room thermostat so the temp. cannot exceed 21 degrees. no complaints.
we also have a fair use policy, which is rather cumbersome but have managed to reclaim small amount.
Whats the problem, I have an HMO with 9 tenants and its very simple. The house has a main meter for gas /elect. Each unit has its own unit meter and when the bill comes in I read the unit meters to work out units used. Then charge the going unit cost plus standing charge and vat charge is apportioned among each tenant. For one bathroom shared the same applies. The difference in units from those collected and total units is the common areas which i pay. This works out very well as any increase or decrease in unit cost is calculated on each time the bills come in. Also this way I am in control of switching should
computer hiccup- switching should I find cheaper prices. Tenants are happy as they know the cost of power and know I will always switch for lower costs or find the best deal at any one time. This way my power costs are fully covered as these are in additional to the rental costs. Trying a set rents with a figure for power means you are out of pocket more often than not and also it makes tenants aware of what they are paying. So no lights, heating etc left on in their units as they are paying for it. Finally this way i can react immediately to changing prices either way up or down.
Thanks Douglas, what type of tenants do you cater for? I'm curious which markets this works in.
I'm aiming at the upper end of the HMO market and there appears from my research to be a preference for an 'all in rental price' and a local precedent for providing 'all in pricing'.
I'm very conscious that 'all in' doesn't lead to the most economic use of utilities and I don't want abuse of such things to hit my bottom line.
Obviously they want all in price as they are not stupid. They know prices are rising and with the swings and roundabouts they probably pay less than you are charged, Also what happens if you give a 6mth contract and prices rise the following month. You are out of pocket. Ok if it goes down they could come back to you and ask for reduction as they have a right to ensure you are not over charging them for gas/electric. They are in a win win position. My way they pay for what they use and does not come out of my bottom line. My tenants are mainly skilled workers, plumbers, carpenters etc - mind you they are all earning very good money and are well aware of costs.