Why Do Some Management Companies Pay for Certain Utilities but Not Others?

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Anyone who has ever shopped for an apartment has noticed that different management companies pay for certain utilities and not others. It’s common to see thing listed like “water, trash and sewage provided” or “heat included in rent” in apartment listings—or “no utilities included!” What is provided varies from management company to management company, and often times it has to do with the type of building in which the unit is located. However, there’s no absolute answer as to why some companies pay for certain things and not others. Here’s some insight to why certain utilities are paid for and others are not.

Paying For Certain Utilities Simply Makes Sense for the Management Company

Especially in the case of buildings with fewer units, like old brick buildings converted into twelve individual apartments or a three-story house converted into three apartments, paying for some of the building’s utilities rather than having each tenant charged individually makes more sense. You’ll find that single building residences, as opposed to huge apartment communities, tend to pay for things like water, sewage and trash because the management company finds it easier and more economical to pay the bill for the entire building. The cost of those utilities is simply accounted for in your rent. Water, sewage and trash are the most commonly provided utilities in apartments because the rates stay the same overall from month to month. Management companies don’t want the hassle of

A Place Is More Attractive To Prospective Renters When Certain Utilities Are Paid

A tag at the end of an apartment listing that says “no utilities included” is pretty unappealing to prospective renters. Typically it’s nice to know, from a renter’s perspective, that you’ll be given a break on at least a few of your utilities. Management companies know this, and providing some utilities can help fill a vacant apartment faster.

Providing Some Utilities Can Be a Money Maker for Management Companies

it can actually work to a management company’s advantage to pay for some of the utilities. Say, for instance, the management company provides heat during the winter, which could be over a hundred dollars in the coldest months. Paid heat is appealing to many prospective renters. A management company could charge above the market value for an apartment because they’re paying for the heat. Over time, they could make extra money since the heat is only used during the winter. Management companies that provide all-inclusive units where all utilities are included in the rent (sometimes even including cable) typically charge higher rents.

Some people like the ease of writing only once check every month—and not having to pay all of the initiation fees. Even so, it generally works out to be less expensive when you pay your own utilities because you’re in control, not the management company.

There really isn’t a right or wrong way to go. Do your research to see how much utilities typically run in the unit you’re viewing. Just know that every place is different and companies have various reasons for why they choose to provide the utilities that they do.

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Rachael Weiner: I’m a communications professional for a non-profit, which financially necessitates my status as an apartment dweller. Constantly “on-the-go,” I’ve resided in five different apartments across the United States over the past five years. Roommate issues, budgeting, organizing and handling problem neighbors are my specialty.

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