I own a property that I have hired a property manager to handle short term rentals. They recommend switching utilities to their name. Should I do this or continue to pay the utilities myself? They say it’s easier come tax time because they provide a statement that includes everything.
I would personally keep them but I also wouldn’t have a property manager so I may not be of any help. If you do put them in PM name I would ensure it was fully addressed in the management agreement.
Why would the property management co. want the utilities in thier name? This sounds fishy to me.
I agree with MtnGal. The only reasons I would guess for having utility bills switched to the property manager’s name are:
- Establish your rental address, as his/her full-time residence. This helps if the property manager wishes to send his/her children to a better public school district.
- Establish better credit when borrowing money.
It is a property management company/realtor, not an individual. I am using them because I am leaving the house and moving to different state but don’t want to sell yet. I don’t think it’s fishy because they have no problem with me keeping them. They just said it would be easier for tax reporting.
Can’t see why it would make it easier for you come tax time (I am presuming you keep monthly expenses figure for your STR including utilities).
I am not sure what STR is (state tax return?) but I do not keep an expense report because I have not had investment real estate yet and up until this point it has not been to my advantage to itemize. BTW, I’m in Texas-no state income tax.
Short term rental…
Assuming you trust the property manager, I don’t see it as a bad thing as it completely moves the investment into the passive income category. But, I would make sure that your name remains on the utilities along with theirs so that you can talk to the utility companies in case anything should ever go awry that you have to handle.
That sounds like good advice. Since they are paying all the expenses, i.e. lawn service, cleaning service, pool service, etc., from the rental proceeds it makes sense for them to pay utilities also. I will check to see if I can have both our names on the utility accounts so they can pay bills but I can retain some measure of control and access.
Thats super convenient actually. I bet it makes paying the bills easier.