Some single-family rental property owners recognize the benefits they can gain from offering certain amenities to their tenants. A considerable number of Beacon Hill property owners have started considering if they should include amenities such as internet and cable television service as well as utilities like water, sewer, and even electricity in the cost of the rent. And doing this, in some cases, makes a rental home both more competitive and more attractive to tenants. On the other hand, some renters don’t really want the amenities offered. This means you losing out on potential applicants. This only goes to show that it is important to know your target demographic. When you understand them and know which amenities your local market would go for, then you will be able to choose the best options for your rental homes.
There are markets where offering amenities is expected and there are others where it would give you a competitive edge. It may also allow you to charge a higher rent. In a neighborhood with many young professionals or retirees who rent, there may be strong demand for “all-inclusive rentals,” or properties that offer not just a house, but additional services as well. They may be looking for a rental home that adds cable and internet services as well as utilities. Especially if your plan is to rent out the property to more than one individual, providing such amenities can eliminate conflict between them, allowing them to escape many of the more common hassles of home rental. For situations like that, you can easily raise the rental rate to cover the costs of each amenity, and tenants like these would gladly pay the higher rate.
However, in some markets, it wouldn’t make sense to provide amenities like cable, internet, and utilities. For some demographics, it wouldn’t do you any good. Even with the increasing popularity of internet service and cable television, some renters just don’t need or want it. For these tenants, having them pay more for a service they don’t want would just drive them away.
Many renters prefer making the decisions themselves. They want to have a say on whether they pay for these types of amenities, as well as the freedom to choose their own service providers. The same applies to utilities as well. Tenants may prefer to set up and manage their own services with the provider of their choice. This is especially true in areas with more than one option for utility service. By doing this, you are also giving them more control over how much they pay for those utilities, rather than paying a fixed sum included in their rent.
Either option brings with it different pros and cons for property owners. Setting up cable, internet, and utilities in your name give you more control over the services available or installed on your property. If the property owner lets the tenant choose their provider, they may have to deal with abandoned satellite dishes or other paraphernalia when the tenant leaves. But if the choice is kept, then you can make sure that utility or other amenities are not creating an eyesore or damaging their valuable property. You also get to enjoy a larger tax deduction on your income tax return if you choose to pay all the utilities. This would then help reduce your tax liability.
However, irresponsible tenants may run up a utility bill, figuring they won’t be paying for the extra charges anyway. On top of that, signing up for internet and cable service typically involves some up-front costs, which may not be so easy to recoup through higher rent. Since you’re the account holder, you’ll have to make sure the bill is paid each month, no matter whether your property is leased or not. In all these cases, there can be a significant impact on the owner’s cash flows, at least in the short term.
Do consider all the pros and cons of offering cable, internet, and utility services. The final decision is, ultimately, in your hands. Remember that each situation is unique, which means there is no answer that would be true for all rental homes. But with the right information, you can be sure that the decision you’re making is the most beneficial one.
Ready to consult the experts in the industry? Contact a professional Beacon Hill property manager today. At Real Property Management Commonwealth, we make it our business to help you succeed in the real estate investment game without all the hassle. Contact us online or by phone at 617-299-2342.
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