Until recently, property managers and property owners under-price rentals by including utility bills or deal with messy tenant utility switching. WellPaid’s new auto-request feature allows tenants to pay for utilities without needing to directly own the utility agreement or embed the cost in monthly rent.
Today, the average house has about 5-8 utility or connection bills that are managed between the owner, property management company, and tenants. Lienable bills, such as water or sewage, are a subset that cannot be turned off and, if not paid, can impact credit of the owner or ultimately result in a lien by the bank on the equity of the property.
Typically, property owners choose to pay lienable utilities, and ask tenants or property management companies to put electric, gas, cable, and trash in their name. Unfortunately, this is almost never a clean handoff and usually requires owner guidance. Every situation is different, and there hasn't been a great way to auto-apply charges to whomever occupies the house.
Some landlords will therefore avoid the hassle and incorporate the cost of utilties into the overall rent price. This is legally allowed, but it does prevent the tenants from having skin in the game with managing costs. Unsurprisingly, many rental property managers complain about their tenants overuse of electricity or gas when it's not billed separately. Sure it's 69 degrees outside, but why shouldn't we crank up the A/C?
Lastly, when tenants switch or move out, the act of switching out bills can be a hassle or result in real cost for the owner. If a tenant moves out early and is responsible for utilities until the next tenant moves in, what happens if they just take their name off the bill? Sadly, that means it comes back to the owner.
WellPaid recently enabled property managers and owners to auto-split and auto-request bills. Any time a charge lands in your checking or card accounts at >11,500 participating banks, the service can auto-request the amount from your rentals. Better yet, there is no argument from tenants, since the cost is bank-validated.
For the odd move-out or switching of tenants, a landlord or property manager simply needs to add a new tenant to the rental unit and the charges will auto-request. Just like any other rent collection or payment service, WellPaid uses simple bank transfers to move money and works with existing bank accounts. Additionally, the service is flexible and costs only $3 per month for landlords or property managers to request an unlimited number of rental properties.
Additionally, WellPaid provides automated transfer routines between accounts to help simplify auto-saving for taxes or putting money aside for future maintenance. Whether you need to move money one-time between accounts or split rental income to pay mortgages, setting a routine for money is intuitive and fast. Finally, WellPaid allows your tenants to lookup sharing restrictions for their common household subscriptions to make auto-splitting even easier. A better experience for landlord and tenant.
In the past several years, room renting or coliving has blossomed into a meaningful share of the rental market. Companies such as Bungalow now offer fully furnished and all-inclusive living spaces for a fixed price per month on the tenant. These units are targeted at the upcoming Gen Z renters that are less likely to commit to a full 12-month lease.
As with anything in managing rentals, standardization is tough. Some renters prefer a 12-month lease, but there is always the possibility of switching or early move outs. Some renters prefer fully managed properties. However, you plan to manage your rental, the reality that short-term rentals are more profitable, when not vacant.
The more experienced property managers will tell you that you can make more on marketing rent by itself than including utilities in the total. However, auto-requesting utilities on tenants is more convenient, reduces revenue lost from transitions, and gives you flexibility to maximize rental listing prices.
Ultimately, it’s best to keep your tenants incentivized to manage utilities, but with WellPaid’s auto-requesting features, you can simplify the billing function and give the experience of an all-inclusive property. Additionally, the auto-savings and auto-splitting features makes managing tenants effortless with simple alerts to let you know if someone is late. Try out WellPaid here to learn more.
