Utilities: Is It Possible to Budget Before Moving In?

  |     |   Rental Tips & Advice

Throughout the length of your search for a new apartment, you probably are on the hunt for one main thing–a specific rent price or range. And while that is a great starting point, you need to be thinking beyond rent. Why? Because that is not the only expense you will be responsible for once you move into your new place. Can you afford to pay both rent and additional utilities? How much will your utilities cost, and how can you be sure before signing a lease?

Budgeting the cost of utilities is always complicated, particularly if you are a first-time renter and haven’t got the slightest clue how much is typical for electricity, water, gas and other bills. Let’s start with the basics.

The primary utilities you can expect to pay are electric, gas (which can be powered by either propane or natural gas), oil, kerosene and other fossil fuels, water and/or sewage (which is wastewater from your apartment or home). Depending on where you live will determine what source heats and cools your apartment. In some markets, natural gas has a monopoly while electric is dominant in other areas. With a little research, you should be able to find national–and more importantly–regional monthly averages for these utility costs. Regional averages are actually quite helpful because it allows you to examine what is normal to pay in your area. It would not make sense to look at average utility costs in Florida if you live in Alaska, right?

It’s so hard to estimate the cost of utilities because there are so many different factors at play. For example, some apartments include water and garbage collection with rent. That does not mean that those services are free. Rather, the costs are just wrapped up into your rent so that you do not have to pay them separately. In these cases, rent may seem a little bit higher. Then you have instances where water and garbage collection are separate, so the rent may be lower, but you still have to factor in the cost of the utilities since they are not bundled with the rent.

And that’s not all. There are additional fees that could also be tacked onto the back end of your rent price. Two of the most common ones are parking fees and pet-related fees. They are not utilities, but they can still largely affect how much your pay for rent. While apartment hunting, make sure you are conducting real apples-to-apples research. For example, you would probably feel tricked if you signed on to pay $500 per month, then you later discover that parking and garbage collection are additional required fees that are not included with rent. Do you due diligence. Find out what all is included in the rent so that you can make an informed decision about where you can afford to move.

One of the many things you will need to take into consideration is the seasonal implication of utility costs. For instance, a gas bill is typically higher in the colder months than it is in the winter months because it costs more to heat your space than to cool it. Electricity bills may be higher in the summer because you may rely on various appliances to keep your apartment cool. The point is, estimating these costs is difficult because they fluctuate so much. On the other hand, you can expect utilities like phone, cable and internet to probably remain the same each month, especially if you lock in a package with a specific rate.

The condition of the apartment itself can play a huge role in just how energy-efficient it will be. How old are the windows? Are there good quality window treatments like mini blinds in place? How recently have weather stripping, caulking and insulation been tended to? How old are the kitchen appliances? These are all areas in which old or outdated features will cause you to pay higher utility bills in the long run.

To find out just how much you might be expected to spend every month, you have a number of resources at your disposal. By simply asking, you could glean lots of information from your would-be landlord, the current or previous apartment tenant, or neighbors. If you are tech-savvy, browse the websites of local utility providers. They may have calculators or other tools that allow you to see how much your bill may actually be. Keep in mind that those will be estimates, not exact quotes.

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