When you closed the books on 2024, the cushion you count on wasn’t really there. The Dominion bill crept up, water and sewer bumped in July, the tax bill added a fire levy, and an inspection recheck fee showed up the same month your HVAC decided to quit.
Nothing catastrophic, just enough small hits to make your NOI feel fragile. If last year felt snug, 2025 will test the seams even more.
In Fredericksburg, electricity, water/sewer, and compliance costs are rising at the same time and every dollar lands straight on the bottom line.
The upside is that these pressures are both knowable and manageable. With clear numbers, a preventive maintenance plan, and a disciplined rent strategy, you can keep tenants happy, protect cash flow, and preserve asset value. The pages that follow show exactly how to do it.
Key Takeaways
- Electricity: Dominion Energy Virginia has asked regulators for a base-rate hike that could raise a typical residential bill ~15% over two years, plus a 2025 fuel-factor reset, pending approval, so plan conservatively.
- Water/Sewer: The City’s FY 2026 utility rates took effect in July 2025; the posted schedule shows current charges reflecting budgeted increases for operations and capital.
- Real Estate Taxes: Fredericksburg’s FY 2026 real estate tax rate is $0.80 per $100 plus a $0.01 fire tax, and reassessments must reflect 100% fair market value, so appreciation pushes bills higher.
- Inspections & VRLTA: The Rental Housing Inspection Program (RHIP) covers the College Heights/College Terrace district with defined fees under the statewide maintenance code, while 2025 VRLTA changes center on notice and payment-processing rules, not retrofit mandates.
Utilities: What to Budget in 2025
Electricity
Dominion has asked the state utility regulator, the Virginia State Corporation Commission (SCC), for permission to raise base rates to help pay for grid upgrades. If approved, a typical home bill could rise by roughly 15% over two years.
There’s also a separate “fuel factor” adjustment (the pass-through cost of fuel to make electricity), which can nudge bills up or down during the year. Nothing is final until the SCC rules, but it’s smart to plan as if bills will be higher.
Water & Sewer (City of Fredericksburg)
New City rates began in July 2025. Your bill has two parts: a usage charge (priced per 100 gallons) and a fixed service fee that depends on your meter size. These rates help fund day-to-day operations and long-term system repairs and upgrades.
Simple planning steps
- Build a 12-month forecast: Use the City’s posted water/sewer rates and your last year of usage. For power, model two columns, no change vs. potential SCC increase.
- Add a cushion: Until the SCC decides, budget an extra 10–15% on the electricity line so surprises don’t hit cash flow.
- Update fast: When a new order or rate notice comes out, refresh your forecast that week and adjust your plan.
- Track monthly: Compare actual bills to your forecast so you can correct early if costs run hot.
Real Estate Taxes: Rates, Assessments, and Dollars
For budgeting purposes, remember that FY 2026 runs from July 1, 2025 through June 30, 2026. During this period, Fredericksburg charges $0.80 for every $100 of assessed value, plus $0.01 for fire services, a combined $0.81 per $100, which is roughly 0.81% of your property’s assessed value each year.
A quick rule of thumb: every $10,000 in assessed value adds about $81 to your annual tax bill.
Just as important, assessments are required by Virginia law to reflect 100% of fair market value. That means your bill can go up even if the tax rate doesn’t change, if your property’s assessed value increases because the market rose, your tax due will rise along with it.
Put simply, the combined rate works out to about 0.81% of your assessment. So if your property is assessed at $300,000, your FY 2026 bill would total $2,430, that’s $2,400 from the real estate rate ($0.80 per $100) plus $30 from the fire tax ($0.01 per $100). If your assessment is $350,000, the bill comes to $2,835—$2,800 for real estate tax and $35 for the fire tax.
What to do when your notice arrives:
Open your 2025 reassessment notice as soon as you get it and mark the appeal deadline on your calendar.
If you believe the assessment is too high, prepare a simple, fact-based packet: recent comparable sales that better match your property, photos and notes showing any condition issues (roof, HVAC, foundation, finish level), and a rent roll if income supports a lower value.
Then follow the City Assessor’s instructions for submitting your appeal on time; late or incomplete filings are usually declined.
Inspections & Compliance: The Rules That Actually Apply
Fredericksburg’s Rental Housing Inspection Program is district-based, not citywide, right now it covers College Heights/College Terrace.
Rentals there must be registered and inspected on schedule; fees are $50 for the first inspection and $100 for a re-inspection after a failed check, using the Virginia Property Maintenance Code as the standard.
State law updates (VRLTA, effective July 1, 2025): Landlords with more than four units must give 60 days’ notice for non-renewal, and there are limits on credit-card “convenience” fees. Duties for smoke and carbon-monoxide alarms still apply where required; there’s no new 2025 mandate to retrofit electrical panels.
Action step: If your units are in the RHIP area, do a pre-inspection against the maintenance-code checklist to avoid re-inspection fees, and schedule annual safety-device checks with written tenant notifications.
Practical Margin Protection
- Energy efficiency: Air sealing, attic insulation, LED lighting, and smart thermostats consistently deliver fast paybacks. When replacing equipment or appliances, select ENERGY STAR models.
- Preventive maintenance: Trackable PM (filters, caulk, weather-stripping, irrigation checks) reduces utility waste and surprise work orders.
- Rent strategy: Virginia doesn’t cap rent increases, but timing and notice rules still dictate how and when you can adjust. Use market comps and staggered increases to protect occupancy.
- Budget discipline: Refresh your cash-flow model quarterly with actual utility invoices, current tax projections, and any SCC and City updates.
FAQ
Can I just raise rent to cover these increases?
Often, yes, but do it strategically. Follow lease terms and statutory notice requirements, time increases to renewal cycles, and validate with market comps to protect occupancy.
How will I learn about my 2025 assessment?
In reassessment years, the City mails notices and provides parcel lookup and appeal steps online. Mark the appeal deadline as soon as the notice arrives (City Assessor).
What are the most cost-effective energy upgrades?
Air sealing, attic insulation, LEDs, and smart thermostats. On replacement cycles, choose ENERGY STAR equipment and appliances; track results in your utility forecast.
Costs Are Up—So Is Your Advantage
Cost pressure in 2025 isn’t a headline; it’s a line-item reality. But landlords who translate rules and rate sheets into clear operating plans will outperform. Build scenarios, calendar compliance, and keep a tight maintenance loop. That combination preserves NOI, steadies tenant experience, and protects long-term value, even as baseline costs rise.
Want a Fredericksburg-specific plan for your portfolio? Gem Realty can benchmark your utility profile, model tax impacts, and map a compliance calendar that cuts avoidable costs.
Request a free property consultation and turn 2025’s headwinds into manageable line items!
Additional Resources
Turning Your Primary Residence Into a Rental: IRS Rules and Tax Strategies
