Some single-family rental property owners know that offering certain amenities to their tenants is profitable. Many Elkhorn property owners have thought about including 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 certainly, in many cases, this does make rental homes more competitive and also makes it easier to attract tenants. On the other hand, some renters may prefer not having the amenities offered, which risks you losing out on potential applicants. This is a clear example of why you need to understand what your target demographic wants— which amenities appeal to them. Knowing your local market is key to making smart choices for your rental homes.
In some markets, when you offer amenities, you’re giving your rental home a competitive edge; in others, it’s expected. It may also allow you to charge a higher rent. If your location has a high population of 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 searching for a rental home that includes cable and internet services as well as utilities. Especially if you plan to rent a property to multiple people, providing such amenities can eliminate conflict since they no longer have to deal with the issue. For such cases, you can easily raise the rental rate to cover the costs of each amenity, and these kinds of tenants would be happy to pay a higher rate.
However, for some demographics, providing amenities like cable, internet, and utilities doesn’t make sense. Some markets just don’t have the demand for these. Even with internet service and cable television increasing in popularity, that doesn’t mean that all renters want or need it. For these tenants, asking them to pay more for a service they don’t want will probably drive them away.
Many renters want to decide for themselves. They want to be the ones to decide whether they pay for these types of amenities, as well as have the freedom to choose their own service providers. It’s the same for utilities as well. Some tenants may prefer to set up and manage their own services with the provider of their choice. This usually happens in areas with more than one option for utility service. Doing this also gives them the power to choose how much they pay for those utilities, rather than paying a fixed sum included in their monthly rent.
Both options have their respective advantages and disadvantages for property owners themselves. Setting up cable, internet, and utilities in your name give you more control over the services available or installed on your property. The property owner would have to contend with abandoned satellite dishes or other paraphernalia if they leave the choice of provider up to the tenant. But if you get to decide, then you can make sure that utility or other amenities are not creating an eyesore or damaging their valuable property. You could also benefit from a larger tax deduction on your income tax return when you pay all the utilities. This can 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. Also, signing up for internet and cable service typically involves some up-front costs, which a landlord may have trouble recouping through higher rent. Since you’re the account holder, the responsibility falls on you to make sure the bill is paid each month, no matter whether your property is leased or not. These situations can significantly impact an owner’s cash flows, at least in the short term.
The final decision is yours alone to make, so do think about all the pros and cons of offering cable, internet, and utility services. Remember that there are different situations and scenarios, which means there is no one solution that would work for all rental homes. But with good information, you can be sure that you’re making the most profitable decision.
Why not consult the expert in the industry? Talk to a professional Elkhorn property manager today. At Real Property Management Legacy, we make it our business to help you succeed in the real estate investment game without all the hassle. Don’t hesitate to contact us online or give us a ring at 402-983-8365.
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