Apartments with Utilities Included: What Are They?

Utilities are an oft-overlooked aspect of the rental process. Most renters assume they'll cross that bridge when they come to it.

However, renting an apartment with utilities included offers renters an opportunity to take a completely different route with a single bill covering rent and utilities.

Finding an apartment with utilities included is as simple as looking for one on an apartment listing site (Hint: you're on one!). That said, deciding whether an apartment with utilities is right for you takes a bit more work.

This guide will break down everything you need to know about apartments with utilities included to help you make an informed decision. Let's dive in!

What are Apartments with Utilities Included?

Apartments with utilities, or “all-bills-paid” apartments, are units rented out with the included cost of one or more utilities. However, these apartments are also those in which the landlord or property manager covers the cost of utility bills.

This included rate opposes the common rental agreement terms, in which the tenant is responsible for covering basic utility bills out of pocket.

Basic utilities include gas, electricity, and water. Additionally, some apartments with utilities may include internet service as well as traditional utilities. However, not every apartment unit advertised as having utilities included in the price of rent covers basic utilities.

Apartments with utilities are more commonly found in larger apartment communities, rather than smaller or older apartment communities.

How Do Apartments with Utilities Included Work?

Although apartments with utilities may sound like a dream, there are some things to know before you decide to sign a lease agreement on an apartment with utilities included.

Although you will have one less bill to worry about at the end of the month, you don’t get your utilities for free.

Because your landlord or property manager is responsible for covering your utility bills, these costs are lumped into your monthly rent payment at a set rate.

Your monthly rent won't fluctuate based on your usage, but you'll likely end up paying a higher rate for your utilities than you would have paid if they were separate.

These higher rates are because your landlord or property manager must account for the average cost of utility bills across multiple units and ensure that they have the extra funds to cover anyone who uses more than usual.

Landlords can't predict heat waves in the summer or cold spells in the winter, so they have to overestimate to cover these costs.

In short, apartments with utilities included may end up costing you more than an apartment without utilities included.

Are There Any Utilities That Aren't Included?

Apartments with utilities included typically cover the essentials: electric, gas, water, sewage, and trash. You'll rarely find an apartment with utilities included that goes beyond the basics.

As a result, utilities like internet, cable, and phone are rarely included, meaning you'll still need to create a line item for those in your budget.

Pros of Apartments with Utilities Included

Like any rental unit agreement, apartments with utilities included have their advantages and disadvantages.

If you're considering renting an “all-bills-paid” apartment, it’ll require an understanding of both the advantages and disadvantages to make an informed decision.

The following list explores the advantages of renting an apartment with utilities included.

A Single Monthly Bill Makes Budgeting Easier

There's nothing worse than looking in your bank account and finding less than you expected because your account was charged for a forgotten bill.

Unfortunately, bills may come out of your account at different times during the month. The more bills you have, the harder it becomes to have them be charged around the same time.

Additionally, if your bill isn't charged directly from your bank account, you'll have to remember to pay multiple bills every month.

In an apartment with utilities included, you get one bill every month that covers your housing costs opposed to paying your electricity, gas, water, and rent at different times each month.

Plus, the costs don't fluctuate, so you don't have to set aside more money in the warmer or cooler months.

Avoid New Utility Services Activation Fees and Credit Checks

You've already budgeted for the considerable expense of moving into a new apartment. Your bank account is already reeling from the costs related to moving fees, security deposits, and furnishing your new apartment. On top of all that, you need to set up utility services in your new apartment.

Unfortunately, this new activation requires you to pay an activation fee and you may have to undergo a credit check. When you lease an apartment with utilities included, you don't have to worry about having a second credit check just to get the lights on, nor do you have to worry about additional activation fees. Everything is covered under the fees and deposits you paid to rent the unit. In short, you can save time and money when renting an apartment with utilities.

Better yet, there's no need to schedule utility activation; your landlord will handle that.

Use Utilities Without the Guilt

There are a few living situations in which you might feel a little anxiety or guilt related to your utility use. For example, you may:

• Live with roommates (and split utility bills)
• Be prone to washing clothes multiple times a week
• Cook a lot and must wash a lot of dishes daily
• Shower multiple times a day
• Run an electric heater during the winter months.

You might feel guilty because these actions can inflate utility bills or make you feel that you are wasting resources. “All-bills-paid” apartments are great for a variety of lifestyles and utility usage.

Whether you're a Sunday meal prep warrior or a daily exercise go-getter, you won't have to feel guilty about your utility usage.

Cons of Apartments with Utilities Included

On the flip side, there are significant disadvantages to renting an apartment with utilities included. Here's a breakdown of the cons of an apartment with utilities included.

Expect a Higher Monthly Rent Price

It's challenging for landlords to accurately estimate utility usage throughout the year. As mentioned above, lifestyle often affects utility usage. Moreover, if your landlord is covering the utility cost for multiple units, it's even harder for them to estimate. To make up for the uncertainty, landlords typically overestimate the cost of apartment utilities, as it’s the best way to ensure that they don't have to cover the cost of an underestimated utility bill out of pocket.

If you're renting in a competitive market and don't over-use utilities, renting an apartment with utilities included may be cost-ineffective

You May Not Have Full Control Over Your Utility Usage

As stated above, landlords can't accurately estimate the cost of utilities in your apartment if you control the utilities.

Besides overestimating the cost of utilities, landlords may compensate by standardizing utility usage across their units. This is most common in older buildings, which have central heating and cooling across all units.

In some cases, most commonly from November to March, landlords turn on heat from a set date and turn it off at another set date. A/C may not even be included in this arrangement.

All things considered, it's important to discuss what utilities are included in the lease agreement and what the standard practices are when it comes to utilities.

Don't make the mistake of assuming you'll have control over the thermostat, just because you see one in the apartment.

You May Experience Rent Hikes More Frequently

The cost of utilities is on the rise and has been for a while. Over the past ten years, residential electricity rates have increased by 15% nationally. In some states, these rates have increased by up to 40% over the same period.

To compensate for these rising rates, landlords may:

• Invest in solar energy to reduce costs
• Upgrade appliances to be more energy efficient
• Increase rent rates to cover rising costs

Regardless of the route they take, the cost usually falls to tenants. As a result, you may experience rent hikes in an apartment with utilities included more frequently than apartments without utilities included.

Final Thoughts

Whether an apartment with utilities is right for you will depend on several factors, namely your personal preferences. Would you prefer to control your thermostat, or is the promise of a unified housing costs bill too good to pass up?

Regardless of your choice, it’s important to make housing decisions based on what works best for you. Take our quiz to narrow down your rental options based on what you want out of an apartment!