Handling utilities and dealing with bookkeeping can bring some of the most hassles and challenges for landlords in Massachusetts.
It is critical to know where you stand with the law and responsibilities to provide essential utilities to renters, how to assist tenants in hard times so that they don’t have to choose between paying you or their utilities and recognize the best bookkeeping practices for maximizing returns.
Massachusetts Landlords & Tenant Utilities
When it comes to utilities and rental properties it is essential for landlords to know which they are responsible for paying.
Water: In almost all cases Massachusetts landlords are responsible for providing water
Fuel for Water & Heat: The landlord is legally responsible for providing these unless stated otherwise in a written lease
Electricity & Gas: Unless there is a meter which separately calculates each tenants usage and there is a written lease delegating the tenant to pay for these services they are the landlord’s responsibility
Of course it is pretty common knowledge today landlords cannot just shut off tenant’s utilitity services for non-payment or as revenge for any other actions. Not providing essential utilities can land you in court and under violation of the Sanitary Code.
However, educated rental property owners can educate their renters on the help available to them for minimizing and paying their bills. This reduces the conflict in prioritizing whether they should pay the heat or the rent, meaning investors are more likely to receive rent, on time and consistently.
This includes discounts for low income earners, protection from cut offs in winter and resources like the Salvation Army which can help pay bills in a cash crunch.
With Mass. landlords frequently having to pay many utility bills, this brings a lot of hassle when it comes to bookkeeping. It shouldn’t be hard to pay bills but for some reason something always crops up causing hours of wasted time, headaches and unfortunately often extra fees.
Many landlords overlook how big of an impact this can have on them and their investment returns. Time is money and that means beyond the immediate stress handling their own bookkeeping digs deep into cash flow and takes away from net profits.
Of course utilities bills are just the tip of the iceberg. There are cleaners, lawn services, contractors, marketing and screening expenses and bills too.
A DIY landlord could outsource bookkeeping and all of their other tasks individually but this often just means a more trying time hiring, training and managing these individuals and companies
For most this is simply a waste and financial folly when a full service property management company can also handle bookkeeping as part of their services, saving time, stress and many dollars.
A property management company will also understand how your investment is performing. Without reliable financials, how will you know how your investment is performing. What is your investments Internal Rate if Return (IRR)? Is it time to sell? Is it a good time to refinance and take advantage of positive leverage? Good bookkeeping is critical to measuring and managing your asset’s performance.
How much is your time worth? How much is your sanity worth? What were the real goals you had which drove you to invest in real estate in the first place?
Isn’t delegating your bookkeeping essential for solving these issues and allowing you to enjoy more free time and income?