Hello! Today, I have a post from Jennifer Riner of Zillow. Enjoy!
It’s difficult to budget for a rental when the monthly utility rates are unknown. While a unit may have an ideal price tag, utility costs can add up quickly.
Renters need to consider these additional expenses before deciding if they can afford a particular unit.
Here are seven utility costs to budget prior to searching for an apartment.
Heat
What’s the fun in renting the perfect apartment if it’s going to be unbearably cold? Tenants in cold-weather climates should plan ahead for monthly heating costs.
Multi-unit buildings equipped with radiators don’t typically charge extra for heating because the fees are included in the cost of rent. However, detached houses require oil burners, gas or forced air to keep rooms at comfortable temperatures.
Heating a single-family home can run tenants anywhere from $100 to $300 per month. For roommates sharing financial responsibilities, heating costs can be split up to avoid significantly increasing monthly expenditures.
Landlords and previous tenants are the best resources for heating cost estimates, so establish a solid line of communication to prepare adequately.
Gas
Some buildings with gas ranges in kitchens require natural gas for cooking. While $15 per month is minor compared to other utility costs, charges can increase for renters who spend a lot of time in the kitchen.
Electric
Electricity in apartments usually costs around $30 to $50 per month, but can fluctuate depending on how much time is spent indoors. Leaseholders who use their rental spaces as offices might end up shelling out more cash to local electric companies.
In addition to lifestyle, the time of year can affect the price of electrical bills. Units with air conditioning have higher electric bills in the summertime.
Also, rental units equipped with energy conserving appliances such as high-efficiency washing machines and refrigerators require less electricity. As long as tenants are careful about turning their lights and electronics off when away from home, electricity costs shouldn’t be astronomical.
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Air Conditioning
Air conditioning is an expensive, but often indispensable luxury. Lessees can be charged as much as $300 per year to keep their apartments cool and dry.
Depending on location and weather, air conditioning is typically only operated during late spring, summer and early fall. Larger apartments require heavy duty air conditioners that cost more to run. On average, it costs around $50 per month to have A/C during the summer months. Living in warmer climates means higher air conditioning fees for longer periods of time.
For instance, Houston apartments may cost as much as $80 to $90 per month to keep cool. However, Texas residents don’t have to worry about heating expenses often, so they spend less during the wintertime to balance out their utility fees.
Internet
Internet service providers differ in the cost of their monthly subscriptions. Depending on packages or promotions offered, renters can expect to pay around $45 per month. However, the bill can be easily split up evenly amongst roommates. Consider bundling Internet with phone and cable for a cheaper price.
Cable
Netflix and Apple TV have diminished what was once an essential component of every home. Although cable isn’t the only option available, interested renters can find deals frequently.
In addition, many Internet and cable providers are part of the same corporation. As long as tenants are using the same company for their cable and Internet, they can bundle for about $90 per month. Again, splitting bills with roommates significantly lessens the impact it has on an individual’s budget.
To keep costs low, invest in high-definition televisions equipped with digital antennas for basic television channels.
Insurance
Insurance isn’t considered a utility fee, but is a highly-recommended and sometimes required monthly expense. Most multi-family apartment buildings suggest tenants protect themselves with renter’s insurance before signing leases. At $150 per year on average, renter’s insurance is well worth the price to protect personal belongings in case of break-ins, fires or floods.
While some of these fees are optional, prospective tenants are wise to take them all into consideration when budgeting for rental properties. Even if leaseholders don’t purchase Internet or air conditioning now, they may reconsider during tenancy.
How much do you spend on utilities each month? What do you do to lower your utility expenses?
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moneystepper says
Great tips Jennifer. With utility bills increases every year, finding new ways to be more energy efficient can have a really substantial impact on the budget!
We budget all these areas separately and review them every 3 months to determine ways to reduce the costs. Cashback sites when switching providers usually makes the new product much cheaper in the long-term.
Michelle S. says
We are always looking to find ways to become more energy efficient. Being nice to the environment and also saving money is a plus for me! 🙂
Thomas @ i need money ASAP! says
“Multi-unit buildings equipped with radiators don’t typically charge extra for heating because the fees are included in the cost of rent.”
I lived in a building like this in college. They kept the heat so low that it was absolutely freezing in the apartment. I remember one sad day when an elderly lady in the elevator asked me when I thought they would turn the heat on, I had to tell her that it was already on. She looked defeated.
If you live in a building like this and have a slum lord owner then plan some extra cost for space heaters.
Michelle S. says
Oh no! That does not sound like a good situation at all.
Thomas @ i need money ASAP! says
No, not good at all. It was a pretty sad and unfair situation.
Amandaa says
I just moved into an apartment where we have to pay our own utilities, and it is so hard to budget for – especially because it’s our first time paying them in this city. We were appalled when we got our first gas bill – we used about $29 worth of gas, but our bill was for $105! The “extra charges” were for storage, delivery, taxes and a monthly fee. UGH! They sure didn’t tell us about all those fees when we signed up!
Michelle S. says
Wow that’s crazy that there are so many fees. I’ll have to look at my bill and see how many fees are associated with mine.
Stefanie @ The Broke and Beautiful Life says
Luckily, in NYC, heat and hot water are included in the price of rent. One less thing to worry about.
Michelle S. says
That’s good!
Holly says
Not sure if we are an exception to the rule but when we had an apartment we rarely used the A/C unit. Most of the year our electric bill was only $17 or $18 per month. This is in Ohio.
Michelle S. says
Wow that is awesome! Our electric bill in the summer is usually around $100.
Poor Student says
I love this list! After college I’m also going to live in an apartment and these are important things to keep in mind. Thanks for sharing!
Michelle S. says
It’s a great list 🙂
DC @ Young Adult Money says
I spend “too much” on utilities. Our old windows and doors are to blame. I’m sure if/when we get them replaced we’ll save a decent amount each month on heating and air conditioning. For now, though, I’m more focused on some other home upgrades.
Michelle S. says
Luckily, when we bought our home, the previous owners put all new windows in (they were contractors, so I’m sure they did it for cheap), so our utility bills are fairly cheap.
When you say “too much,” do you mind sharing how much you spend? 🙂
Shannon @ Financially Blonde says
We have been shocked by our utility bills this winter, but I am sure it has to do with the crazy arctic winter we have had here in NY. We typically put our heat/cooling on a timer system and keep it low or warm during the day. In the winter, we use our fire place more to help heat the home. In the summer, we spend a lot of time in our neighborhood pool so we don’t have to cool the house all day.
Marvin says
In the winter we spend way too much money on utilities. Although lately I have not been worrying about that expense as much as I did when I was younger. I’d honestly live comfortably and spend a couple more dollars than going without.
Marie Zalbe says
Our utility bill is only $25 per month. My family were able to put limits on using utilities. It’s in Philippines.
No Nonsense Landlord says
My tenants pay ~$125 for the units that they have to pay rent. My worst duplex was 646.82 for both gas and electric, for ONE month! f course in MN, it was WAY cold.
Ryan @ Impersonal Finance says
Great tips, and I definitely think insurance is a must. I’m ready for spring, and being able to turn off the heat and just open the windows. I’m especially looking forward to the reduced energy bill!
DNN says
Good morning Michelle,
I’m glad I don’t have to deal with that for now because what I’m doing is striving to save any and every penny is possible so I can pump more money into PPC paid advertising to run affiliate links. Things are looking good and I’m so glad about it. Enjoy your day and looking forward to your next blog.:-)