How Submetering Companies Can Benefit Your Property | Multifamily Utility Company

For property managers, it can be relatively difficult to control costs on their property while also trying to keep rental rates matching their competition. Chances are, if you do not have any utility solutions or strategies in place, any minor change in the energy costs can significantly impact your property and tenants. However, there is a method which multi-family property managers can implement that offerc a wealth of benefits: submetering.

What is Submetering?

Submetering is a method that property managers can utilize in an efforts to reduce utility costs for the community. Once implemented, submetering the individual utility bills will make tenants pay for their own utility bills based on their utility usage. This could be seen as a favorable factor for both property managers and tenants.

Saving Property Managers Money

What many people do not realize is that without submetering, property managers are spending a significant portion of their budget on utilities. Property managers are responsible for charging an entire multi-family community equally for the energy usage. So, if tenant A uses $150 of electricity and tenant B uses $50, both tenants would owe $100 to the property manager for utilities. Given how problematic and backwards it sounds, submetering would be a much cleaner and money-conscious route to take.

With submetering, it can usher in a whole new wave of energy and money conservation. Reason being, once the property managers decide to switch to the submetering system, everyone is charged per what they use and, as a result, tenants will quickly begin to cut down their average utility consumption. This does not bare to mention the immense benefits of helping the environment by naturally decreasing the amount of carbon in the air.

This may ease up tensions in the budget and may allow for property managers to allocate their money elsewhere. Perhaps it may be easier to notice the significant difference and benefit of submetering in the following.

BEFORE SUBMETERING:

  • 50 units on property and property manager is responsible for paying all property utilities.
  • Water cost per year = $50,000.
  • Property manager pays = $50,000 

AFTER SUBMETERING:

  • Initial cost = $50,000 for Water.
  • Conversation lowers consumption by nearly 20%.
  • Total costs = $40,000. With common area deduction, $36,000 is billed to residents.
  • Total cost to property manager = $4,000

In simple math with this example, it’s evident that submetering is significantly more beneficial. Could you imagine what a property manager can do with an extra $46,000 in their budget?

Making Your Property Marketable

In this day and age, rental properties are more competitive seemingly than ever before. With that being said, it’s imperative as a property manager to find new methods and avenues to stand out from your competition. One of the best ways to do this is through incorporating submetering into your multifamily community. If you can only imagine how future tenants would feel knowing they had to split their utility costs with the entire community – this may be a huge turn-off, unless of course the tenant is an energy-consumer. With that being said, through introducing submetering into your community, it provides a leverage and selling point for your community that perhaps surrounding multifamily communities do not have.

Aside from this, submetering has a tendency to decrease energy-costs, as we discussed before, which can then help lower the base-rent for new-leases and make tenants happier with potential interior remodeling, community updates, or community events. In this, these facets can add-up to improve the marketability of your rental community. In the example provided before, with over $46,000 with a small 50-unit community, can you imagine the updates or changes that the property manager could make? Do you know what that means for the entire property?

Increasing the Property Value of Your Community


If you guessed it – the property value of your multifamily complex will increase. In that, there are a wealth of benefits that come with an increased property value. In fact there are three major benefits that any property manager dreams to achieve.

* Competition
Through increasing the property value of your community, it’s a leverage against your competitors. Rather than compete with fellow multifamily complexes, your community can stand strong while other competitors try to compete with you.

* Profits
The increased value, thanks to submetering, can actually have a direct effect on your profits. Reason being, if a property manager takes the money-in-savings and utilizes that to invest in the property itself, the base-rent price can be increased, as a result, driving up the profit margins.

* Traffic and Prospects
If you, as a property manager, are looking to increase your daily prospects and traffic, increasing the property value can significantly help. When a community decides to do a renovation or update their rental models, more locals or neighboring prospects may hear about changes and want to see the differences. In this, property managers might be able to secure new tenants, effectively adding to the profits of the community and minimizing the competition even more.

It’s clear that property value plays a major role in the success of a multifamily community. It’s imperative to take measures to stand out from the competition and, in that, it will help increase property value – all of which, in this case, can be attributed to switching to a submetering-base system.

Submetering is Ushering in The Future 

Every property manager strives to find new effective ways to increase the property value of their community in relation to the competition and rent-rates. Through incorporating submetering into your multifamily community, it can help save money, promote energy-conservation, make your property marketable, and on top of that, it gives the property manager the financial capacity to update the entire premise, all of which are techniques and methods to increase the property value. It’s evident that submetering is the base utility-solution for multifamily complexes and, without it property managers would be struggling and extending a budget that may soon run out.