How to Estimate Utility Bills for Your New Home
In an economy where more than a third of Americans are struggling to pay their utility bills , knowing what your future utility bills will be before you decide to buy a home is a critical part of the decision-making process—or at least it should be.
Here are some methods to help you estimate what your future electric, gas, and other utility bills will be before you move in so you don’t get an unpleasant surprise in the mail.
How to Get a Good Estimate for Home Utility Costs
The first step is to find out how much the previous tenants of the house paid each month. Here’s how to do it:
-
Find out your local rates. Knowing how much your local utility company charges for electricity, natural gas, water, sewer, and other utilities is key. Most utility companies post their rates on their websites, so that’s a good place to start. If you can’t find rate information that way, you can use a website like Utility Rates to get an idea of the electricity and gas rates in your zip code. Online calculators like this one can give you a decent estimate of your future utility costs once you have the rate information to input.
-
Gather a payment history. The next step is to request a payment history for the home over the past 12 months. Your real estate agent should be able to help you with this, but you can also ask the current owners directly. Reviewing bills for the year will allow you to figure out the average monthly cost, adjusted (if necessary) for the number of occupants.
-
Look at the average costs in the area. If you can’t get a billing history, you can make a much rougher estimate by looking at the average costs in the area. There are websites that can help you figure this out. For example, EnergyBot will calculate your potential utility bill based on your zip code and average usage for your home size, or you can use this calculator from the Energy Solutions Center to calculate your gas bill based on factors like home size and the number of dryer loads you run per week. These calculators will only give you rough estimates, and your results may be higher or lower than your actual costs, so tracking your actual bills is always the best solution.
Put past bills into context
In addition to monthly figures, to estimate your potential utility costs, you’ll need to gather some additional information about the home and its occupants, including:
-
Occupants. You need to know how many people lived in the home during the period you’re considering so you can match that to your potential usage. Sky-high utility bills are a concern if there are just two people living there, but less so if there’s a family of eight crammed in there.
-
Usage: You’ll need to know a little about how the previous tenants lived – whether they lived there full-time, whether they worked from home (which increases energy consumption) or had hobbies that use up extra energy, and whether they had a pool (which increases water and electricity bills).
-
Problems. Ask if the home has had any recent plumbing or electrical problems. Leaks and faulty wiring can cause spikes in consumption , which may mean the home’s spending history will be less useful for predicting future bills.
Once you have a clear idea of what your utility costs were, you can make some adjustments based on your lifestyle (how many people live there, whether you work from home, hobbies, etc.) to get a figure that is as close to your actual utility costs as possible.