Counting the Costs: How Location DRASTICALLY Shapes Utility Bills

Owning a rental property is a lot like driving a car—what you pay depends on where you’re going. Gas is cheap in Texas, but hit California, and suddenly you’re paying a fortune at the pump. Utility costs are no different. A property in Utah? Easy on the wallet. A rental in Connecticut? Not so much. Where you own matters. The climate, local infrastructure, and even the rules of the energy market shape your bills, often in ways you can’t predict.

If you want to keep those bills under control and boost profitability, understanding location-specific costs is key. Whether you’re braving a summer in Arizona or winter in Maine, It’s not just about the weather—it’s about energy access, water availability, and market regulations that all play a role in how much you (and your residents) pay every month.

The States Where Utility Bills Hit Hard—and Where They Don’t

Forbes crunched the numbers on average household utility costs across the U.S.—and the results might surprise you. Here’s how it shakes out:

Top 5 States with the Lowest Utility Costs

1. Utah: $343/month
2. New Mexico: $364/month
3. Idaho: $368/month
4. Colorado: $372/month
5. Nevada: $377/month

Top 5 States with the Highest Utility Costs

1. Alaska: $570/month
2. Hawaii: $564/month
3. Connecticut: $533/month
4. West Virginia: $486/month
5. Georgia: $475/month

The national average? $429 per month. If your properties fall on the high-cost side of the spectrum, you’ll feel it—and so will your NOI. But even properties in expensive states can turn properties into NOI-driven opportunities with the right management strategies.

Surprising Factors That Make or Break Your Bills

Regulated vs. Deregulated Energy Markets

Energy markets work differently depending on your state.

• Regulated states (like Alabama) lock you into a single energy provider, offering stable but fixed rates. You get predictability—but at a cost.
• Deregulated states (like Texas) let you shop around for the best energy deals. Flexibility is great, but it can mean more price swings, requiring active management.

Understanding the differences between these two models is crucial for investors. Regulated markets may offer more predictability, but they can stifle competition and make it harder to reduce costs over time. Deregulated markets, while riskier due to price volatility, can provide more opportunities for savings if managed correctly. This knowledge is essential when considering the long-term viability of both new construction and existing portfolios.

Energy Costs: Local Access Makes the Difference

• Hawaii: Has the highest energy bill at $178 per month. Why? 80% of its power comes from imported fossil fuels —and those costs get passed along to property owners and residents.
• Utah: Thanks to local access to hydro, solar, and wind , monthly energy costs come in at just $80.

Local access to energy sources makes a huge difference in monthly utility costs. Hawaii’s dependence on imported fuel highlights the risks of investing in regions that lack local energy production. Conversely, areas like Utah, with abundant renewable resources, offer more stable and affordable energy options. Investors need to consider these factors when evaluating where to expand their portfolios, as energy infrastructure can either drive up costs or serve as a safeguard against rising prices.

Water Costs: A Tale of Two States

• California: Water scarcity drives the average monthly water bill up to $77.
• Wisconsin: With its 15,000 lakes, Wisconsin residents pay just $18 per month for water.

The disparity in water costs between California and Wisconsin underscores how natural resources—or lack thereof—can significantly impact utility bills. As droughts are predicted to worsen in the southwest, investors must weigh the long-term risks of operating in water-scarce regions. Properties in these areas may face unpredictable price hikes or even water access issues, making them riskier investments without proper planning.

Internet: The New Must-Have Utility

In 2024, internet access is non-negotiable for multifamily residents. On average, they pay $70/month for internet—and they expect it to work flawlessly. Offering community-wide WiFi through bulk internet management saves residents money and adds value to your property.

The Hidden Value of Smart Utility Management

If you’re managing properties in high-cost states like Connecticut, every bit of savings counts. Trimming 10-15% off a $533 utility bill means $80 more per unit, per month. Across a large portfolio of properties, that’s a game-changer.

But smart utility management isn’t just about dollars—it’s about keeping residents happy and lowering turnover. Residents appreciate transparent billing and reliable services. The right utility management strategy will make your properties more attractive and reduce costly resident churn.

Make Location Work for You

Utility bills don’t have to be a burden. Whether you’re in high-cost regions like Hawaii or low-cost states like Utah, knowing how to leverage energy markets and optimize services will put you ahead of the game.

Want to know where your state stands? Check out Forbes’ full breakdown of utility costs by state to see how your properties compare: Check utility costs by state

Need Help Lowering Your Utility Bills?

At Conservice, we help multifamily operators streamline utility management—so you can focus on what matters most: running your properties efficiently. Talk to us today to learn how we can help you save time and money, no matter where your properties are located.