Why rental property owners and landlords should cap guests’ utilities usage

Utility costs are one of the most overlooked risks in rental property management – and, as a few unfortunate souls have learned, they could end up costing landlords dearly if overlooked.

Utilities generally refer to essential services such as electricity, water, gas, and sometimes internet or trash collection—costs that can quickly spiral if not monitored. For landlords, the question isn’t just how much utilities cost per month, but also who should be responsible for paying them and what protections should be in place to prevent abuse. Most short-term rental owners may not think to put a limit on how much electricity or water a guest can use—but they should.

Recent stories from Airbnb hosts highlight how badly things can go when renters misuse home utilities. In one case, an Airbnb host in Charlotte, North Carolina discovered guests had brought in at least 10 computer rigs to mine Bitcoin. According to Business Insider, the host was left with a $1,500 electric bill in just a few days—because the guests found it cheaper to rent the house than pay for the electricity required to power their supercomputing operation.

Another viral story, covered by the Daily Dot, featured a host who discovered guests had used 15,000 gallons of water over a short stay. The guests owned a washing business in town and had turned his rental property into a laundromat. While the property itself wasn’t damaged, the water utilities bill was astronomical, and the machines in the house were run nearly non-stop.

These cautionary tales make it clear: landlords need to take control of how utilities are handled. Whether you own a long-term rental or manage a short-term Airbnb, setting utilities caps can save you from financial headaches.

Average cost for utilities per month in a rental property

Before diving into solutions, it’s helpful to understand the typical range of utilities costs. On average, Airbnb hosts report monthly utilities bills between $200 and $400 for small apartments, and $400 to $800 or more for full homes, depending on location.

• Electric utilities: Air conditioning, heating, and appliances are often the biggest contributors. For most rental properties in the U.S., electric utilities average $100 to $200 per month for apartments and $150 to $300 per month for houses. In hotter southern states like Texas or Florida, electricity costs can spike in the summer, often pushing monthly bills toward $300 to $400+ when air conditioning is running heavily.
• Water utilities: The average water bill ranges from $40 to $80 per month for apartments and $100+ for houses. Heavy use—like in the laundromat Airbnb example—can send bills soaring.
• Gas utilities: In colder states, heating bills add another $50 to $150 per month on average.
• Regional differences: States with higher energy prices (like California or New York) will see higher average utilities cost per month compared to places like North Carolina or Texas.

For landlords, knowing these baseline numbers is critical, as is paying close attention to the monthly bill. Any sudden spike in the utilities bill is a red flag that a guest or tenant may be overusing—or misusing—your property’s resources.

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Long-term rentals: protecting yourself through leases

In traditional rental housing, it’s more straightforward to manage utilities. The best approach is to have tenants pay directly for their home utilities by setting up accounts in their own names. This keeps landlords out of the equation entirely and ensures tenants are directly responsible for their utilities bill.

Most large property management companies will always make their tenants set up their own electricity, gas and internet accounts when they sign a lease. Even if you only own one rental property, it is almost always possible to get your tenant to sign up for their own electric bill, which should eliminate any conflict over high utility prices.

If, however, a landlord insists on including electricity, gas or water in the rent landlords should:

• Write specific terms in the lease that outline reasonable usage.
• Add enforceable clauses that hold tenants financially responsible for abnormal spikes in utility costs.
• Set caps for included utilities, stating that any overage will be billed directly to the tenant.

Lease clauses like this help avoid disputes when tenants run up costs by leaving the AC on 24/7, running multiple washer/dryers, or bringing in equipment that consumes excessive electricity.

Including clear language about whether or not rent includes utilities, and specifying exactly which utilities are covered, also reduces confusion. It’s especially important in states with strict landlord-tenant laws, so always check state-level rental regulations before finalizing lease agreements.

Short-term rentals and Airbnbs: house rules and transparency

Short-term rentals are trickier for several reasons. For one, hosts can’t always screen for unusual behavior until it’s too late. Airbnb only gives hosts ten days from checkout to dispute charges, and the platform may rule in favor of the guest unless terms are clearly laid out in writing beforehand. Additionally, many STR owners have multiple guests per month, and it may be tough to keep track of who exactly is using what.

Still, Airbnb hosts and vacation rental owners can—and should—set clear house rules about utilities usage.

Here’s how to do it:

• State caps in the listing: In the “About this space” section, mention that electricity and water usage is capped at a specific amount (e.g., $150 for electricity and $50 for water per stay, or a specific gallon or kWh amount).
• Detail overage charges: Airbnb allows hosts to charge guests for extra costs within 10 days, but only if these charges are clearly disclosed in advance. Spell out how much guests will be charged if they exceed caps.
• Stay transparent: Many states have laws requiring fee transparency for STRs. If you list a utilities cap, you must disclose how overages will be measured and charged.
• Monitor usage: Consider installing smart meters or tracking tools to measure electricity and water utilities during each stay.

These measures don’t just protect you from nightmare guests running crypto farms or laundromats. They also help set expectations for ordinary travelers, who may not realize that leaving lights, AC, or washing machines running constantly can add up fast.

If you rent on Airbnb, VRBO or another short-term rental platform, always be sure to check the platform's rules before starting to rent.

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Read more: VRBO host cancellation policy explained: Why owners are furious

Why utilities caps are essential for landlords

The stories of the Bitcoin miners and the Airbnb laundromat show that utilities misuse isn’t just rare bad luck—it’s a growing risk for landlords in both long-term and short-term rentals.

By setting utilities caps and drafting strong agreements, landlords can:

• Prevent abuse of electricity and water utilities.
• Keep monthly operating costs predictable.
• Protect their rental property’s systems and appliances from excessive wear and tear.
• Clarify responsibilities for tenants and guests, reducing disputes.

In the long run, this isn’t just about saving money on an electricity or water utilities bill. It’s about protecting your investment and ensuring your property remains profitable.

Final thoughts

Landlords today face a wide range of risks, from property damage to tenant disputes—and utilities misuse is one of the most overlooked. Whether you’re managing a long-term lease or an Airbnb, capping utility usage and putting clear rules in place can save you from the horror stories other landlords have faced.

At Steadily, we specialize in protecting landlords with tailored rental property insurance. While insurance won’t cover runaway electricity or water bills, it does safeguard you against property damage, liability, and other risks. If you own rental property, don’t wait until you’re left with a $1,500 surprise—get a quote today and protect your investment.