Keeping inclusive HMO utility bills down??

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  • Keeping inclusive HMO utility bills down??

    Hi Im completing on my first HMO & was wondering if you could give some guidance on managing utility costs?

    Property is 4 bed, 2 bathroom, kitchen & lounge. Heating is currently oil (non condensing boiler) & was family house. Property based in Northern Ireland & gas connections are limited in my town.

    How do you usually ensure inclusive bills dont get out of control & do you havve any suggestions about heating controls that I could include early in the refurb?

    Thanks for your help

  • #2
    Originally posted by hopelesslydevoted View Post
    How do you usually ensure inclusive bills dont get out of control?
    Don't have inclusive bills.

    I suggest you have one tenant who pays the bills and collects the rent from his lodgers. This has worked well for me for 17 years.

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    • #3
      Or have 4 tenants on a joint contract where they pay the bills. You may not need an hmo licence that way either, alghough not sure about NI

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      • #4
        Oh thats interesting. HMOs in my area all seem to be advertising inclusive broadband, electric & heating so in my ignorance I'd thought that was the norm. JKO & DPT57, would that be an instance when the tenants know each other or does it work for strangers too?

        Unfortunately 3 unrelated sharers or more would mean I need registered

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        • #5
          Yes, my tenants usually know each other.

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          • #6
            I think it has to depend. I used to let my student house on a joint contract but each year I would need to replace one or two of the 4 students. Sometimes other tenants would find someone, sometime me. They don't always get along though so if you can find 4 people who already know each other and want to share the house together, all the better

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            • #7
              Good advice. I usually let to working families - for one of my other houses I got groups of nurses looking to share but the property wasnt HMO registered. This one is very close to local hospital & other major employers. I now know to look out for groups of friends!!

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              • #8
                If at all possible, do not do all inclusive bills.

                I have one experience only - and in short, when bills are all inclusive, people have absolutely no respect and take the mickey!

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                • #9
                  Yes Claymore, thats what everyone seems to be saying! I thought inclusive bills were generally standard in HMOs but I will try to avoid!

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                  • #10
                    Originally posted by hopelesslydevoted View Post
                    I thought inclusive bills were generally standard in HMOs...
                    They're a requirement of room only tenancies but not of a joint tenancy.

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                    • #11
                      I have gas combi boilers and they all have a horstmann timer on them. Google them and see if you can get one or similar and get the one with the shortest times on it. The tenants have to switch it on when they want heating. Make sure you make it clear no large electric appliances such as tumble dryers and heaters are not included in the electric componant of the rent so please don't bring them into the house. I've never had anyone bring in a tumble dryer! I always include gas and elec, water, council tax and BB but not a tv licence for the room although there is one for the shared living room.

                      If you have tenants leaving the windows and doors open with the heating on put up a notice along the lines of 'in order to keep rents down please ensure windows and doors are closed when the heating is on'

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                      • #12
                        I like that berlingo, I'll have a look at the timer thing

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                        • #13
                          Originally posted by Claymore View Post
                          If at all possible, do not do all inclusive bills.

                          I have one experience only - and in short, when bills are all inclusive, people have absolutely no respect and take the mickey!

                          The key to successful and virtually trouble-free renting, is to know who you are putting into your home.
                          This is true regardless of the type of tenancy you are operating and has been true for eons.

                          I have operated a HMO for over 25 years, with limited trouble during that time (during the first 7 years), from 2 people, out of 75. I never lost money in the end and each person taught me something.

                          In answer to the OPs question, the only way to judge how much to set the rent to include the cost of utilities, is to know what usage has occurred over a long period of time. This unfortunately cannot be known unless you have had a home for several years (say 5 minimum), with a variety of people and with different weathers.
                          I would then add an additional margin of 10-15%, to cover for unexpected rises in energy costs and extra usage due to harsh winters and changes in tenant lifestyles (more cooking at home, staying at home longer or if they become unemployed, sick, etc).
                          You should also set and monitor the on and off times of the heating in case your tenants don't know how to do this or don't want to bother.

                          But I can share with you all that in all the time I have rented my home, the usage of energy has remained remarkably consistent. This does not surprise me and should not surprise anyone else, since people have very similar needs.
                          If you are new to inclusive rents, perhaps try to find what other landlords charge in your area, directly from other landlords of similar homes (including checking their ads) or through letting agents. You can also pro-rata what you find if info on 4 bed/2 bath homes is thin on the ground.

                          The idea that when you get rid of limits, then "all hell will break loose" is not borne out by the facts.
                          Many of you will remember the furore about ending pub licensing laws, with fears that there would be "widespread drunkenness left right and centre", never coming to fruition.
                          The same goes for people's behavior when it comes to other things. Unless a tenant has a grudge against a landlord, he/she is not likely to behave in a manner to excessively use energy, just for the hell of it because they can.
                          This view of tenants is one of the reasons for the poor underlying relations between landlords and tenants, even before the two have even met. And I would suggest someone who thinks that way is more likely to attract that behavior, unwittingly.

                          If a tenant behaves in this manner, then a landlord has much more than an energy problem with that person or group of people and which goes back to my first point and to the careful assessment of anyone that you let into your home.

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                          • #14
                            Originally posted by JK0 View Post
                            Yes, my tenants usually know each other.
                            I thought the law ignored that - it doesn't matter if they know each other? A group of friends (even if they arrive together to rent a place and pay a single amount) would still make an HMO unless they are part of the same family?

                            https://www.gov.uk/renting-out-a-pro...occupation-hmo


                            Going back to the original question of HMO utility bills, I recently came across the following. I don't know if this is specific to one council or if it it being rolled out elsewhere:

                            PART 6: HMO MANAGEMENT
                            Utility bills should be registered in the name of the landlord/manager who is responsible for paying the bills

                            https://www.lbhf.gov.uk/sites/defaul...occupation.pdf

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                            • #15
                              My tenant is the manager, and the landlord of her lodgers.

                              I know it's an HMO, but not licensable if I keep it under five.

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