How to manage utility bills as a student property manager

When renting a property to students, you need to consider how to manage utility bills in a way that is both convenient and cost-effective for you. Before you begin a tenancy, decide whether you want to include the cost of bills at a set monthly rate within the rental fee or whether you would prefer the tenants to be solely responsible for managing their own utilities. 

Both have their own specific benefits and drawbacks. To help you decide which would be most appropriate for your properties, we've outlined the pros and cons of each option. 

Offering a bills-included rental agreement

A bills-inclusive rental agreement allows tenants to make one payment a month, which covers the cost of their rent and all their utility bills. Typically, the utilities included will be energy, gas, water, Wi-Fi, and sometimes a property's TV licence too, if applicable. However, students will not be responsible for paying council tax as part of a bills-inclusive agreement, as they are exempt. 

When you offer bills-included agreements, you are primarily selling convenience. For students in particular, this is a big bonus. They don't have to worry about finding or switching providers; all of the utilities will remain in the landlord or property manager's name, and they only have to budget for one set payment a month. 

The drawback for student tenants is that a bills-inclusive agreement tends to drive up the cost of their monthly payment. This is because the property manager needs to ensure that all usage will be covered in advance. 

The drawback for property managers is that utility costs can change on a monthly basis, particularly in the current climate. However, you can't simply pass on any increase to your tenants, as you will have already determined a fixed rate that tenants will pay monthly in the tenancy agreement. Therefore, you need to be mindful of how rising energy costs could affect your profit margins, particularly in the winter months when usage might be higher. 

On the other hand, the primary benefit of a bills-inclusive agreement for property managers is the control you'll retain. You can choose the utility providers that suit you, ensure that all bill payments are made on time, and avoid any surprise unpaid bills at the end of the tenancy. Plus, offering the option of bills-inclusive tenancy will help to make your property more attractive to a wider range of students, helping you to fill vacancies faster. 

Offering a bills-excluded tenancy agreement

If you choose not to offer rents with bills included, then your student tenants will be fully responsible for managing and paying their utility bills. They will only pay the rent to you each month and will have separate agreements with the utility providers they choose. This makes your property appear cheaper to prospective tenants, which can be very appealing. Some students may prefer to opt for a bills-excluded tenancy agreement because of costs, especially if they think they can find cheaper utilities packages than those you are offering in an inclusive agreement, or if they intend to keep their usage very low. 

The primary benefit for property managers is that the responsibility of utility management is passed to a third party. You'll save time and hassle by avoiding the administrative tasks associated with managing utility bills. 

However, if your student tenants fail to pay their bills on time or leave any outstanding unpaid bills at the end of their tenancy, this may have negative implications for you and your property later down the line. It's important to ensure that your tenants understand their utility management responsibilities before they sign the tenancy agreement or move into your property. 

Bill-splitting services and student energy partnerships

There are lots of bill-splitting services available, like The Bunch and The Student Energy Group, with packages designed specifically for students. Student tenants can input the utilities they need covered, get a quote for their chosen package, and receive a monthly bill for their share of the utilities. This helps avoid confusion and arguments about who should be paying what.

Concurrent by StuRents partners with The Bunch and The Student Energy Group. When you use our property management platform, you can empower your student tenants to select a utilities package as part of the booking flow, giving them energy, water, and Wi-Fi without any administration for you. From November 6th, you can earn up to £75 + VAT per tenant by choosing either The Bunch or The Student Energy Group in your tenancy settings. For tenancies that don't include gas and electricity, tenants will be offered tailored energy deals as part of their signing journey. This service is fully GDPR compliant and requires no administration from you.

Want to know more? Book a Concurrent demo today.