Charging Tenants a Flat Utility Fee
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Managing utilities in rental properties has become increasingly challenging for small landlords. In this shorty episode of the Your Landlord Resource Podcast, Stacie Casella and Kevin Kilroy discuss a strategy many landlords are beginning to implement: charging tenants a flat monthly utility fee.
Many duplexes, fourplexes, and older multifamily buildings have shared water meters, which means landlords often include water, sewer, trash, and recycling in the rent. Historically this worked well when utility costs were predictable. But as rates continue rising in many areas, landlords are often unknowingly subsidizing tenant usage.
In this episode, Stacie and Kevin explain how a flat utility fee works, how it differs from RUBS (Ratio Utility Billing System), and why landlords may choose this method as a cost-sharing solution. They also discuss how tenants typically respond when this change is introduced and the importance of communicating clearly and implementing the fee properly through lease renewals.
Stacie shares real examples from their own rental properties and explains how they calculated a fair utility fee while still maintaining positive tenant relationships. The goal is not to increase profit but to allocate shared building expenses more fairly while helping landlords maintain sustainable rental operations.
If you own small multifamily rentals and are struggling with rising utility costs, this episode provides practical insight to help you decide whether a flat utility fee might be right for your property.
What You’ll Learn in This Episode
- Why many landlords historically included utilities in rent
- How rising water, sewer, and trash costs impact rental property profitability
- What a flat monthly utility fee is and how it works
- The difference between a flat utility fee and the RUBS billing method
- How tenants typically respond when landlords introduce a utility fee
- Best practices for implementing a utility fee at lease renewal
- Why clear lease wording is essential when charging utility fees
Links & References
EZ Landlord Forms State Specific Leases and Forms
TurboTenant The best tenant management software for self-managing landlords.
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