Available Methods of Recovering Utility Costs
As a multi-family property owner or manager, you esentially have 3 different methods you can use to recover the cost of utilities from your tenants:
- Recover utility costs within the monthly rental fee.
- Allocate costs to each tenant using a Ratio Utiility Billing System (RUBS)
- Submeter - Meter each unit and tenant pays for what they actually use.
A submetering system provides several benefits:
Encourages Energy Conservation
Multiple national industry studies have documented that adding a submetering system and billing residents for their usage will result in the overall utility consumption at the property to fall between 18% and 30% after just a few month. The principle is simple, when residents are responsible to pay for their usage, they use less.
Reduces Utility Costs
The overall utility costs at the property will be reduced. And submetering allows the property to stay on top of increases from the uitlity companies instead of always playing catch up to rate increases. With a submetering system and a billing planin place, monthly rental rates can be reduced, and therefore more competitive in the market.
Increases Cash Flow
When tenants are paying for their utility costs, your Net Operating Income at the property increases accordingly. Typical Return On Investment (ROI) periods for a submetering system are less than 12 months. Net Cash Flow to the owner increases perportionally. Submeter Solutions provides a free ROI analysis for your project with every proposal.
Increases Property Value and Improves Cap Rates
With an increase in Net Cash Flow, property values and Cap Rates also increase. Buyers are increasingly looking for multi-family properties that already have a submetering program in place.
With a submetering system and a billing plan in place, monthly rental rates can be reduced, and therefore more competitive in the market. Utility rate increases don't impact rents and can lead to fewer rent increases.
Reduces Your Administrative Overhead
Let Submeter Solutions calculate individual utility charges for each resident. And because our fee is typically covered by our service charge added to each utility bill, this service is esentially free to the property owner/manager.