For a long time with my experience with student rentals the debate has grown and changed: is it better to go for all inclusive or plus utilities? With the market on renting becoming more challenging, especially on the fringe streets such as Bridge, Josephine, Mill etc., the days of getting a group of students to pay their own utilities is becoming increasingly difficult. But the biggest reason is not the supply and demand of student housing; the whole key to this are the deposits with the utility companies. For people with no credit (i.e. 90% of University students), the utility companies down here have nearly doubled the deposits for the students to make to have them in their name, to the tune of over $1000 between the electricity and gas companies!! The average student is giving first and last month’s rent, and then on top of that has to come up with large deposits, and try to set up internet/cable/phone. It’s just too tough on their bank accounts.
Fortunately, the solution is very simple; do all inclusive leases, but add a cap on the utilities. The typical house is 4-5 bedrooms and you should get at least $50 per student for the inclusive which gives you $200 to $250 for utilities. The typical house should average that for the total utilities over a year, especially if you have done the highly recommended Eco-Energy audit. This is where the cap comes in. You set the cap at what you are getting in the extra rent and if they go over they simply pay the difference. This makes the students extremely aware of the utilities and essentially you have your plus utilities lease without the hassles. What Rhys and I do with our own student rentals, is keep a total of the amount of money that they are under during the summer, and apply that “credit” to the couple months in the winter that they may go over.
We have been extremely effective with this and this is part of almost all of our leases currently. The challenge of renting is dynamic and simple at the same time it is just the subtle changes that make all of the difference.
This entry was posted
on Tuesday, November 3rd, 2009 at 6:27 pm and is filed under Educational.
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