Utilities: Understanding Their Contribution to Your Housing Costs

real estate, tips for buyers and renters  /   /  By Tracy

For many of us, when we are creating a limit to how much rent we can afford, rarely do we factor in the utilities to that amount. But utilities themselves can easily be an additional $200 or more a month, depending on what the landlord includes within the rent itself. Therefore, it is important to do your homework and make your housing budget as realistic as possible.

An example is the electric bill. You might have budgeted for rent of $900 for a one-bedroom apartment. But what if that apartment is primarily run on electricity, from the water heater to the lights? The resulting bill could easily add another $100 to your housing costs. Internet and cable costs also add to this figure. Water is often included in the rent for most landlords, but not all. Older appliances, including water heaters and furnaces, can increase your utility usage and driving up your monthly bill.

Utilities

Utilities

When it comes to housing costs, it is important to research the average monthly utility costs before signing your lease. Most landlords can provide this information, but if they do not, check with the local utility providers. Doing so can offer a realistic assessment of the costs you will incur on a monthly basis.

Remember, that homeowners can make changes to their homes to reduce utility bills, but renters do not have the luxury of adding insulation or changing out drafty windows. So you will have to take the initiative to reduce your utilities through creative measures, such as timers on lights and reducing the temperature of the thermostat during the day to offset your nightly use.

Depending on the geographical area, some utilities will be higher than others

Southern states might see higher electric bills as part of their increased use of the air conditioning. Northern states could see that same increase, but due to a shorter day and longer periods of darkness. Heating costs are also higher in this area of the country. Your personal lifestyle will also factor into your usage costs.

Another point is that if a utility bill spikes, it might be a sign that an appliance could be going out. A high water bill may mean that there is an undetected leak or a toilet that needs repair. Notify your landlord immediately if this is the case, because maintenance can make necessary repairs that will quickly reduce that monthly cost.

Utilities also may require a deposit. Therefore, you have to include this as part of your initial investment when moving into a new home. Call the utilities prior to signing the lease and find out what deposit, if any, will be required to turn on the electric or gas. These deposits may be refunded when you move, or can often be credited against your last bill.

Regardless of where you choose to live, be sure that your budget is not stretched due to monthly utility costs. Factor your utilities into your housing costs and avoid the sticker shock of these monthly expenses.

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