Heating cost control in HMO’s

Hi Mr Hartell, there are a number of options you could use, one is to install a secret or hidden room thermostate wired in series with the one in the hallway or where the tenants control their heating from, so you install the master thermostate where the tenants can't reach or don't know what it is for, it could be disguised a s a smoke detector, and installed on the ceiling, however, ceiling will always be hotter than maid way in the room, so you may have to set it at a slightly higher temperature, so say if you told all your tenants that the place is heated but the maximum temperature is limited to 21C or even say 23C, then there is no argument when the tenants sign up the agreement . Also tell them it will be off during the night and so you also need a hidden master timer, and a good electrician who can wire this up overriding the boiler's normal controls, with this even if the tenants turn the dial of their stat to say 25c or 30c, the boiler will only come on if the room temperature drops below that set on the master unit, which you can preset to maximum 23c, as well as having a timer to switch it off during the night time from say 10pm till 6.00 am.

Further more you could install TRV on each radiator to control individual room temperature, each TRV can be set to suit individual tenant's preffered temperature and tell them that if they had the heating on and had their windows open wide, then they are burning your money, and you will have to put the rent up,

Or agree with them whereby if the bills exceed your expected budget, then they must top it up, so allowing for example maximum of say £200.00 per quarter for gas and say £100 for electric, anything outside this they have to pay, this works with most tenants, and they are then wiser about how much heting to turn on.

Also don't forget you need to educate your tenants how long they take to have a shower as this can use a lot of gas to heat the cold water flowing out of the boiler as well as the cost of water if it was metered.

The best stretegy would be to tell all your tenants that if the bills exceed a certain amount then you will need to make a surcharge on their rent or they can go and find another place if they don't like it.

I have 2 Large HMOs with 7 bedsits in each. On a purely anecdotal level I tried keeping costs down by letting one of the residents be responsible for paying the bills. He was assiduous about switching the heating off when people were at work and at night and switching off unnecessary lights. The result was 1 happy and 6 unhappy residents and increasing amounts of condensation and black mould. When he eventually failed to collect the money and pay the bills I was forced to take back the responsibility to prevent the electricity being cut off and my licence revoked.

The point of the story however is that when I took over the heating was left on constantly at 70 and residents controlled the temperature in their bedsits by the thermostat on their radiators. The bills actually went down! Seems it uses less fuel to keep a constant reasonable temperature than to put the boiler on full blast twice a day to warm up a stone cold building.These are old stone built buildings. The max insulation I can get in is loft and double glazing so the epc is band D.

Hi Mr Hartlett,
I was told of a system that apparently worked very well:

If you take the total of the previous year's bills you will arrive at a maximum cost for utilities, since you tell us the tenants have been leaving the heating on and the lights, etc.
Then you charge each tenant a surcharge for the bills equal to this maximum divided by the number of tenants.
Then tell them, if, when you calculate their useage, if it is less than this amount, then they each get a refund, either on a 3 or 6 monthly basis.

This is similar/same as Mark's solution, but if you make the charge the maximum as it was in the previous year, the next bill, as long as they are turning down their useage, will be less, and they will all get a pretty hefty refund !!

You could keep them updated on their monthly useage, so they look forward to their refund, but don't be tempted to reduce their payments, otherwise they have no incentive to use less, if they've got no refund coming !!

Reply to the comment left by "Jeremy Smith" at "14/05/2014 - 23:32":

I understand the principle Jeremy but what happens when there is no saving because the unit costs have gone up; or they have made the maximum saving they can the next year will be impossible to better?

Reply to the comment left by "Pete Judd" at "14/05/2014 - 23:56":

Hi Pete,
I see where you are going regarding the increase of unit cost, I guess it could be a problem.
The previous year's usage was only intended to give a basis for the first year and not try to better each previous year.
Perhaps I didn't explain it very well, the same thing occured to me as I wrote it!!
It's just to get a "maximum" charge, then the tenants can keep the cost down and get a refund every 3 or 6 months.
I still don't think I explained that very well !!

But thank you, I guess no method will be perfect.

I've been informed by a local cleaning company that a large property company in Sunderland that has all inclusive rents and bills in their HMO's control the heating by locking boilers inside of cupboards.

The heating is then timed to come on throughout the day and the tenants can not access the timer to change the settings. Thermostats on radiators control each room.

Another option would be to check out the price you are paying on utilities and see if any companies are offering lower charges on a fixed term.

Is the house insulated? Does it have an EPC of D or above? if the answer is no, look at improvements to the property that give you a better energy performance.

Another tip I read recently was to defrost fridge freezers regularly as one family spotted their energy bills rising sharply for no reason, they were using a digital monitor - after defrosting the freezer the consumption returned back to normal.

Hope this helps
Loraine

I run 10 HMO's with 50+ tenants but the issue of utility bills is still one challenge I have yet to master. Even the most professional of tenants still have the attitude that it's not their problem as soon as you have left! A changeover to LED bulbs has made a significant difference and we now fit the electronic time delay switches available on EBay for around £10 to all hallways, but they are dangerous in bathrooms/kitchens. The real costs however are gas for heating and the cursed electric heaters that tenants bring with them despite warnings and tenancy terms preventing their use.
We use the tamper proof thermostats. We find the Danfoss manual model where you can buy a replacement dial that is effectively a blank plastic coin the most effective, but the most savvy tenant can work out how to unscrew the unit and turn the internal dial! We also place the timer in a difficult to access location, usually the loft.
I have tried the refund/surcharge route but admin can be a nightmare with tenants moving in/out.
Now I just inform them that they can waste as much gas/elec as they wish but it will be reflected in the annual rent review; sadly even this has limited effect and my average bills for a 6 bed are around £1200 gas £1400 elec annually.
It may seem obvious but the most important factor is to ensure that you are always with the cheapest supplier/tariff. I review this all the time as a sneaky switch to a standard tariff can easily add 50%. Currently the cheapest for us, and we get good service from both, are Daligas for Gas and Better Energy for Elec. (I receive no benefit from these recommendations and you should always run through 2 or more of the well known comparison sites before choosing as the tariffs change all the time)

Reply to the comment left by "Alistair Cooper" at "15/05/2014 - 07:40":

Very insightful post, thank you 🙂
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This has been a constant battle with the HMOs I operate. Particularly irritating in the summer, where the heating is left on full and the windows wide open to warm the atmosphere up.
I have installed fake thermostats, blind thermostats, hidden timers, hidden thermostats, remote thermostats and thrown out anyone who complained. Thus eventually resolving the issue. My bills on one 5 bed went from £665 per month on gas alone to £160....
I looked at incentivisation , but the rooms rotate too regularly to work as an effective incentive...

I'm weighing up installing a zone by zone heating control system.

This would let me monitor and control the temperatures of the property in each room, and make sure that radiators aren't left on in the middle of the summer.

evohome or heat genius are two examples....