We’ve seen some colossal utility rate increases proposed and implemented across the country in the last few months. Costs for repairing and expanding aging infrastructures are often miscalculated, resulting in giant utility rate proposals to modernize systems. In some cases, water bills and electric rates are doubling. As a community owner or manager, what can you do about increasing utility rates?
You could increase the rent to cover these costs, but that can backfire in more vacancies and damage your competitive positioning in the market. Instead, we’d argue that you need a utility recovery program to protect your NOI from rate increases, leaks, and wasteful consumption.
The benefits of a good utility recovery program are:
- Almost anyone can put one in place per their local regulations.
- We watch the regulations for you. Utilities are regulated by several different local and regional entities. We ensure you are code compliant.
- There are multiple ways to recover utilities; in some cases, you would have zero out-of-pocket cost and all upside. Utility recovery makes a massive difference in competitive markets.
- We can correctly allocate all the utilities using various factors for maximum recovery and fairness to the residents.
- If you have submeters, we can monitor them for transmission errors and leaks. Monitoring allows us to catch and correct problems before they become expensive.
- Residents will learn to conserve when they start paying utility bills, so you can expect the master bill to reduce over time. After implementation, we routinely see a 20% reduction in utilities. If you’re in an area that has conservation programs, this will help you be compliant.
- We handle the billing and collections. Our state-of-the-art online portal available 7/24 to your residents and offers many payment options. Residents can sign up for paper or ebills in Spanish or English, and our award-winning support team is there to help. We’ll even provide resident communication materials, freeing up your time to manage other aspects of your portfolio.
- Our account managers, support, and collections team are US-based.
- We partner with Cass, a publicly-traded company and member of the FDIC for utility expense management (UEM). UEM helps you avoid late fees and takes the hassle out of auditing for errors. UEM can save you $6 to $8 per bill. You can add Vacant Cost Recovery (VCR) to a UEM program too.
- We work as an extension of your team, without you having to pay additional staff.
- Your dedicated account manager will know all the details of your property and is available whenever you need them.
- We’ll guide you with any lease language you need to add.
You might be wondering if there is a downside. It can take a bit for residents to adjust to being billed for utilities. We’re happy to guide you through the communication. Your local regulations may be required to roll your program out as leases come up for renewal instead of doing it in one big transition. We’re experts at dealing with these issues and can help make your utility recovery program rollout a smooth and successful process and an asset to your portfolio.