HMO utility bills and metering

[KSH]

Hello all. Can anyone offer any guidance on the best way to manage utility costs in a HMO? I.e.

• Do you meter tenants rooms separately and add the utility costs on to the rent?
• If the above isn't practical, do you build an estimated value for utility use into the rent? If so, how do you work this out?
• Or, do you just add on the actual costs and charge separately, with costs split evenly across the house?
• Or another method?

 

[Luke Masters]

@KSH - We tend to structure the rent as all bills inclusive, due to prior experience we have worked out that as a general rule of thumb all utilities i.e. Gas, Water, Electricity, Council Tax etc is around 10% of the overall gross rental income of the fully occupied unit.

We have never implemented charges for the rooms as it is costly and time in effective to manage, we charge slightly higher rents and often employ clauses in the tenancy agreement to state if the utilities go over a certain amount, the occupants of the house are liable to contribute to the excess.

I hope that is of some use and if you want to speak any further about it drop me a message on here.

 

[nmb]

That makes perfect sense because there is a cost to having multiple meters in one property which brings multiple bills, different payees, etc. Adding that little extra onto the rent and making it all-inclusive seems to be the most sensible and efficient way to solve this issue.