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Cat shaped pylon

In the last post I wrote about starting out in the adventures of renting out a room.  Today, I’m going to jump ahead and talk about rent pricing and structuring because I just received my electric bill in the mail and it made me cringe to see the total amount.

I’m suspecting one of my roommates left the heat on(I have electric heat) while they went out.  I suspect this because there was about 4 weeks in the billing cycle and one of those weeks was the week of Christmas, which meant no one was here and we shouldn’t be using the heat at all.  So, if anything, we should be below out monthly electricity usage for the month of December.

I’ve Seen it Coming

I knew the disadvantages of going with an all inclusive rent price.  For those that are unaware of the downside to this all inclusive rent price structuring, roommates will tend to be careless with utilities such as electricity and water.  Conversely, if my roommates were held financially liable for usage, they would be more conservative of their habits and not be so wasteful.  So it makes all the sense in the world to split the utilities, but I choose not to.  Why?

My Dilemma

I choose to go with an all inclusive rent price because it allows me to setup an automated direct deposit with my roommates.  If I decided to split utilities, it would just delay collecting rent because I would have to wait for each utilities statement to close to spit the bill evenly.  With my love to travel, I’m trying to streamline and automate as much of the rent collecting and bill payments as possible, hence the reasoning for my decision to go with an all inclusive rent price.

However, if and when my roommates carelessly leave the heat on while they go to work, it blows the budget out of the water.  This month, my electric bill was $357 while the prior month the bill totaled to $220 – an increase of $137 or 62% increase!

Going Forward

Next week, I’m going to ask my roommates to be mindful of the usage and even cut back.  I’m going to not use the electric heat at all when I sleep.  Instead of I’m going to sleep in my synthetic down sleeping bag, which is rated to 30 degrees.  My average basement temperature without heat is probably hovering around 55 degrees Fahrenheit.   I’m living in my own townhouse and I can’t even use my own heat.

Asking to Help Out

I’m not going to ask my roommates for money just yet for the recent electric bill.  I’m going to see if they can cut back their electric consumption enough in the coming months to see if they can use less than what I expect them to use to make up last months over usage.  I’ll see how this goes.

I’ll keep everyone posted when I confront my roommates next week.  One of my roommates is in the Navy, so he is out to see for the month.  I have no idea when he is scheduled to return home.  I could send him an e-mail, but I rather tell him in person.

Creative Commons License photo credit: Gribiche

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I’ll keep everyone posted on how the confrontation goes with the electric bill.  I normally don’t have many confrontations like this.

{ 6 comments }
  • Gary September 27, 2011, 11:16 am

    I’m really enjoying your blog- thanks for sharing such excellent info.

    I’m just now getting ready to rent 2 rooms in my house and am pondering the utilities issues.

    My situation is a bit unique as the thermostat is actually located in a part of the house that the renters wont have access to so technically, I’m the only one with my finger on the dial. But, they may complain if it’s too hot in summer/ cold in winter.

    My question is this; if you were in my shoes, would you charge:
    A. All utilites included in rent
    B. Rent + a *fixed* amount for utilities
    or
    C. Rent + a % of the utilities.

    Thx! Gary

    Reply
    • Mike September 28, 2011, 6:43 pm

      Gary,

      Since you have control of the utilities, I would include all utilizes in the rent price. The reason being is that you can expect a fixed dollar every month and it gives the roommates no reason to pay on the 1st. Where as if you divided up the utilities, you would have to wait for the utility bills to arrive and split it then, leaving you without rent money because of the utility statement.

      Option B is basically like Option A – it’s a fixed amount. I don’t know how much you’ll charge for the utility person. I would go with the fixed rent price with all utilities because you control the thermostat.

      Reply
  • Gary September 28, 2011, 10:51 pm

    Excellent, thx!

    1 other question if you dont mind; do you recomend renting the rooms furnished or unfurnished?

    Ive heard that renters may stay longer if they have to move their own stuff in and out but I’m not sure if I’ll turn away a large percent of renters if I only offer “unfurnished” rooms.

    What are your thoughts?

    Reply
    • Mike October 1, 2011, 7:39 am

      I’ve always rented out an unfurnished room. I don’t think it matters too much. I think it all depends on the person’s situation. Let’s say you rented out an unfurnished room, a person can easily move in with an air mattress and a pile of cloths so they have enough to get by for a short term. In short, You can almost get a sense how long they are going to rent for just on their work/living situation rather than renting out a furnished or unfurnished room.

      Reply
  • MA March 10, 2012, 8:48 pm

    My boyfriend and I converted our basement into an apartment and are currently renting it out. Before moving in, we asked that our tenant keep the heat around 22 degrees and to let us know if there were any problems with the heat level before adjusting it herself. We are used to paying 220-240 per month in the winter months and expected that one extra person would add on an extra 100 give or take. We had talked to our tenant once before about keeping the little bathroom heater running all day on 35 (its very noisy and you can hear it all through the house). Now our bills for the last two months have ranged from 490-580, which is much more than they should be. I went downstairs to get something out of the storage area and noticed that the heat is at 35 down there. I had turned it back down to 22 hoping that she would just catch on and I would be able to avoid the confrontation, but the heat is back up again. What “freedom” do tenants have in terms of adjusting the heat? I obviously do not want her to be uncomfortable but I feel that 22 is a comfortable temperature (ours is 19 upstairs) and feel that with an all inclusive rent, one would be more respectful of the utilities they use. Do I have the right to bring this issue up with her? I don’t want to be overbearing and seem snoopy, but we are finding it difficult to keep up with the electric bills (my boyfriend and I are both graduate students). Any advice is appreciated!

    Reply
    • Mike March 11, 2012, 6:34 pm

      Yes, that’s a very real concern about the temperature especially when you’re charging a fixed rent price. I have similar issues with my roommates. For the most part, I’m grateful that my roommates realize that they are paying a fixed price for the rent and make a conscious effort not to abuse it, but I do occasionaly have to remind from time-to-time about turning down the heat. So by me making a statement, they know that I want to conserve electricity. Another thing I have my roommates do, is turn off the heat when they are not home, I know the risks of having pipes freeze and such, but if we’re only gone for 8-10 hours during the day and since the home is pretty well insulated, I don’t have to worry about the pipes freezing.

      With the combination of using the heat liberally when they are home and turning off the heat entirely, I find my electric bill is not too outrageous. In your case, I would definitely talk to your roommate about reducing the thermostat especially when she is not home. I think 35 is just too high and can’t justify keeping at 35 especially when you’re not home. I would start there and see how your electric bill adjust.

      Also during the spring and early summer months, my electric bill is less than what it is during the winter months and almosts averages to where I like it to be. So keep this in mind also.

      Reply

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