Do you offer all-inclusive bills for your tenants or are you considering making the switch for your HMO properties? All-inclusive rent offers utilities and rents included in one monthly payment. University accommodation usually does this, and it’s becoming more common for student HMOs, and professional HMOs as well.
Managing the utility bills as the landlord can provide a number of benefits to both you and your tenants. In this blog post, we’ll cover what comes with offering all-inclusive rent, ways to manage utility bills, and tips for making these bills more economical even during the current energy crisis.
Benefits of Offering All-Inclusive Bills
HMOs with all-inclusive bills often include water, electricity, and gas all in the same monthly price for rent. Sometimes internet, TV license and Council Tax can be included as well.
As whoever’s name is on the utility bills is responsible for making payments, this can be challenging with HMO properties. With co-living, there can be disputes when it comes to paying bills and figuring out who owes what, so taking care of this as the landlord can ease pressure on tenants.
An increasing number of HMO tenants are becoming attracted to all-inclusive options as it saves them time and hassle. It allows tenants to better forecast their outgoings and makes keeping up with their finances simpler. And modern tenants are used to having fixed prices for everything from Netflix subscriptions to phone bills.
Some HMO landlords may be worried they’ll end up being out of pocket if they offer all-inclusive rent. However, there are ways to manage this. Tenants will expect to pay more for a HMO rental that includes all the bills. And you could attract more tenants to your properties by offering this as an option.
It can also make for smoother moves with everything set up and ready to go before the tenant moves in. Additionally, during void periods, you’ll need to pay for the relevant utility bills as the landlord. Because of this, it can often be easier to manage the bills yourself from the get-go.
What Does the Energy Crisis Mean for HMO Landlords?
With the news of energy suppliers going bust and bills soaring dominating the headlines, the energy crisis may be causing worry for HMO landlords offering all-inclusive options. But don’t panic.
If you currently have a fixed-rate deal, your energy bills should stay the same for now. However, whenever the deal ends, your bills will likely increase. If your supplier goes bust, the supply won’t be cut off. Ofgem has processes in place for this.
If this does happen, take a meter reading immediately. You’ll be appointed a new supplier within a few days. Contact them to see what tariff they can offer you. Shop around and see if any other energy provider has a better deal. It may be worth looking into how you can start lowering energy bills moving forward.
3 Tips for Making Utility Bills More Economical
There are a number of ways you can help make the utility bills for your HMO properties more economical. Here are a few tips you can implement into your HMO property investments today.
1. Install a Smart Meter
A smart meter can give environmentally-minded tenants a real indication of their energy consumption and how they could make improvements. With many people wanting to live more sustainable lives, this can help your tenants be aware of what they’re using and could even flag inefficient appliances in the property.
There are smart meters that can also send readings to you, so you don’t have to take these in person, making it easier to manage the bills. It may also be worth installing a smart heating control system (such as INspire or Nest) so you can set predetermined heating parameters.
2. Consider Energy Efficient Improvements
It may be worthwhile to invest in energy-efficient improvements in your HMO properties. This could be something you start doing when refurbishing your properties to ‘future proof’ your HMO portfolio. You could look at using energy-saving bulbs, upgrading the boiler, better insulating the property and investing in more efficient appliances.
On top of that, some of these additions could even improve the property’s EPC rating, which may be appealing to some tenants. Additionally, there is talk that the government could further raise the minimum EPC rating for rental properties in the coming years, so this could also help you get ahead of these potential changes while allowing you to make energy savings as well.
3. Shop around
Shop around and look at switching providers often so you can take advantage of better rates or cash-back offers. At the moment, there may not be much savings to be had by switching energy providers due to the current crisis, but this could change in the future.
Continue keeping an eye on what’s happening within the industry and different providers, so you can make a change whenever it’s economical to.
There are considerations to make when offering all-inclusive options for your HMO tenancies. But there is a range of benefits and ways to effectively manage utility bills to make your and your tenants’ lives easier.
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About the Author:
Andy Graham is the founder and the lead trainer at The HMO Roadmap! He is also the co-founder of The HMO Mastermind and Smart Property, a specialist HMO property investment and management company. He writes as a regular columnist in different magazines about a variety of HMO topics and is the host of The HMO Podcast! Follow Andy on Instagram!