How to Handle Utilities: Included or Separate?

By PropsManager Team | Dec 17, 2025

How to Handle Utilities: Included or Separate?

Option 1: Tenant Pays All (Separate)

• Pros: Landlord has zero risk. If the tenant takes 2-hour showers, they pay for it. Encourages conservation.
• Cons: Tenant has to set up accounts. In multi-family units with one meter, this isn't possible without sub-metering.

Option 2: Landlord Pays All (Included)

• Pros: Simplicity. You can charge higher rent ("All Utilities Included").
• Cons: Tenants will abuse it. They will leave the AC on 60°F with the windows open. One bad month can wipe out your profit.

Option 3: RUBS (Ratio Utility Billing System)

For multi-family units with one meter, you pay the bill but bill it back to tenants based on square footage or number of occupants.

Conclusion

Whenever possible, separate utilities. It protects your cash flow.