In the competitive world of multifamily property management, controlling utility costs is of the utmost importance. With expenses ranking as the third highest for property owners, understanding the nuances of resident billing can significantly impact your bottom line. Two primary methods exist: RUBS (Ratio Utility Billing System) and submetering. But which one is right for your property? Let's dive into the details.

RUBS: Simplified Allocation, Consolidated Billing

RUBS allocates utility costs based on factors like square footage, occupancy, and total property usage. This approach offers several benefits:

• Simplified Billing: Residents receive a single, consolidated bill for rent and utilities, streamlining payments.
• Automated Calculations: Algorithms automate much of the billing process, reducing administrative overhead.
• Predictable Budgeting: Accurate tracking of utility usage over time helps both property managers and residents budget effectively.

However, consider the potential drawbacks:

• Allocation Disputes: Residents may question the fairness of allocated costs if they perceive their usage is lower than the average.
• Regulatory Compliance: Understanding and adhering to local laws regarding cost allocation and fees is crucial.
• Unoccupied Units: You must have a clear strategy for how to account for the utilities of unoccupied units.

Submetering: Precision and Accountability

Submetering involves installing individual meters in each unit, providing precise usage data and direct billing. Advantages include:

• Accurate Billing: Residents pay only for their actual consumption, reducing complaints and fostering accountability.
• Energy Conservation: Residents are incentivized to conserve energy, leading to lower overall usage and a reduced carbon footprint.
• Waste Identification: Submetering helps pinpoint energy waste in common areas, allowing for targeted improvements.

Challenges associated with submetering include:

• Upfront Costs: Installation and maintenance of individual meters can be expensive.
• Administrative Overhead: Managing third-party billing companies and handling individual invoices increases administrative tasks.

Making the Right Choice

Choosing between RUBS and submetering requires a thorough cost-benefit analysis. Consider factors like property size, resident demographics, local regulations, and long-term financial goals. Both RUBS and submetering offer unique advantages. Understanding the specific needs of your property and residents will guide you in selecting the most effective utility billing strategy.

To learn more about how to improve utilities management at your property, download our latest ebook, Take Control of Your Utilities: A Step-by-Step Approach.