Everything you need to know about all-inclusive tenancies

As a landlord, you have two options when it comes to signing tenants to an agreement: non-inclusive and all-inclusive.

What should go into a tenancy agreement?

In this article, we can show you the benefits and potential downsides of both, so you can make an informed decision that’s best for you. If you don’t find the answers to any questions, however, please get in touch with your local haart branch for a chat through your options as a landlord and how haart can help you.

What is a non-inclusive tenancy?

A non-inclusive tenancy means that the tenants pay their own bills outside of rent. These bills are things like utilities (gas and water), council tax and broadband services. The only thing a landlord charges is a monthly rent payment.

The benefits of non-inclusive agreements

The obvious benefit here is that landlords are only responsible for one payment. Tenants take on the responsibility of organising their own contracts with suppliers, paying them directly each month and not the landlord.

For busy landlords this saves time. It’s less hassle for collecting payments and managing services on a tenant’s behalf. This is especially beneficial if you manage more than one property as a landlord.

The risks of non-inclusive agreements

These types of tenancy can be unpopular with younger tenants, particularly students, as they can prefer to have as many bills included in one monthly payment as possible. It may help them to budget more effectively.

This may also be the case for Houses in Multiple Occupation (HMO), as they may wish to split the bills evenly and find that easier with one, flat payment.

If bills go unpaid, although the fault lies with tenants, it can be raised with landlords and cause unwanted stress. With bills such as gas and electricity, suppliers can cut off the service if bills go unpaid. You may also be called to deal with disputes between tenants in HMOs if bills are going unpaid or disagreements arise.

What is an all-inclusive tenancy?

An all-inclusive tenancy is one that sees tenants rent and other bills such as utilities rolled into one payment. As the landlord you can choose what’s included in these agreements, but common things, in addition to rent, include:

• Utility bills
• Broadband
• Council tax
• TV licence

The benefits of all-inclusive agreements

This type of tenancy is popular with younger tenants, particularly in HMO. Students tend to like all-inclusive tenancies because it makes it easier to budget for other expenses and takes the hassle out of splitting the bills between occupants.

If you offer an inclusive tenancy, your property may be more attractive to a wider range of tenants, but it does place a lot more responsibility on you as the landlord.

The risks of all-inclusive agreements

You will need to liaise with various suppliers for the extras you decide to include as well as the rent each month. This might get tricky if you are the landlord for more than one property.

Tenants use of utilities may rise and fall, making the payments fluctuate (depending on the deal you set up with the supplier). Tenants may also overuse utilities, this lack of consistency could make it harder to manage usage and bills etc. You are also responsible for paying the bills, even if tenants fail to pay their agreed rent and included service charges.

You can, of course, use a utility bill management service to mitigate any issues, which will help you to manage payments and profitability on your rented property or properties.

Let haart help

At haart, we help landlords manage their property portfolios. Taking the stress out of payments, tenancy agreements, and anything else that may come up, our property management services are a fantastic choice if you’re a busy landlord.

Get in touch with your local branch and see how we’re on a mission to get your property let.