Counting Income

Even Forbes Thinks a Ratio Utility Billing System (RUBS) Is a Good Idea

Our industry has certainly faced some challenges recently. Late last year, California passed statewide rent control. We also saw a lot of water, gas, and electric rate hikes at the beginning of 2020. Then the pandemic landed on our doorstep, and nearly 22 million people have lost their jobs as a result. Many are asking for rent postponement while they find alternate sources of income at a time we’re being asked to stay inside. It’s a great time to introduce a ratio utility billing system (RUBS) program to protect your income.

Utilities are increasing while people are home, and temperatures are rising. Owners have to also find alternate sources of income. There has never been a better time to diversify your multifamily income with ancillary billing programs. Even Forbes thinks you need a ratio utility billing system (RUBS) program.

As mentioned in Forbes, a Ratio Utility Billing Program is an excellent way to offset unpredictable costs. A RUBS program can almost always be implemented without up-front cost, so it positively impacts NOI as soon as it begins. It can be phased in with new tenants, at lease renewal, or immediately if a billing program is already in place.

In a correctly designed RUBS program, residents pay their fair share of the master utility bill. RUBS programs encourage conservation, which reduces utility waste and brings the cost down for everyone.

RUBS programs are regulated by local and county regulations. It can be easy to miss critical regulatory requirements, so it’s important to work with a competent utility billing partner who can advise on the regulations for each of your communities.

According to Forbes, “Other income can significantly boost your property’s value. If your building is valued at a 7% cap rate, $50,000 in additional other income adds more than $700,000 in value to your property. Look for ways to tweak your other income. In addition to the extra income you’ll receive, you’ll really reap the rewards when you’re selling or refinancing.”

These are challenging times for owners and residents alike, but by working together we will get through it and the multifamily industry will continue to be a critical component of our economy and lives.