Selecting an optimal utility billing method for your multifamily property often presents a challenge for owners, managers or other decision-makers involved in multifamily communities. You must consider a wide range of factors including which is most cost-effective, efficient, easy-to-use for your residents and which aids utility conservation efforts.
Below, we’ll explore three popular billing options and lay out some of the pros and cons to help you make the best decision for your community. Regardless of which option works best for your multifamily property, our team of professionals at Performance Utilities stands ready to assist with all of your utility billing questions and concerns.
Option 1 — All Bills Paid Method
This option delivers a streamlined billing method for residents in an apartment community where an average utility cost factors into the monthly rent amount.
- Pros: This method helps attract new customers and boost occupancy rates by offering utility billing which is easy to use and hassle-free for residents.
- Cons: With an all-inclusive rent amount including utilities, tenants are less likely to consume utilities conservatively. Therefore, the overall utility costs of the multifamily community may be higher than other methods.
Option 2 — Ratio Utility Billing System/Allocated Billing Method
The Ratio Utility Billing System, or RUBS, bills tenants in multifamily communities based on factors including the total number of occupants, size of the apartment and more. This option is only available to properties that were built before 2001.
- Pros: This option even factors in children’s ages when determining average usage costs per household. Therefore, it is a reasonable assessment and may be the most cost-effective method of transitioning utility costs to residents. Additionally, RUBS often leads to moderate levels of water conservation when compared to the “All Bills Paid” method covered in option 1, but not as much as the “Submetered” method covered in option 3 below.
- Cons: Since a tenant’s utility charges are not based directly on total usage, they may be dissatisfied or attempt to dispute the dollar amount of monthly bills. RUBS may also tempt some tenants to abuse water consumption since they pay based on household size and number of occupants instead of actual water usage.
Option 3 — Submetered Billing Method
With submetered billing, each apartment in a multifamily property includes an individual meter. Some submeters are read in person, and others transmit a digital signal with monthly usage readings.
- Pros: Submetered billing offers highly accurate and convenient utility billing.
- Cons: Due to the need to install meters for each unit in a multifamily property, initial costs may be high. Additionally, since submeters may be affected by human misreading or other malfunctions, they must be monitored for errors on occasion.
To aid in the decision-making process, our team at Performance Utilities created the below matrix which allows you to easily compare the factors involved with each method, including:
- Property control: The factor of control your property has on the volume of utility services used.
- Conservation-friendly: A characteristic of how well each billing method contributes to water conservation efforts.
- Usage accuracy: The factor of utility usage accuracy you can achieve per billing method to help you stay on-budget, ensure you bill correctly and help you rapidly identify leaks.
- Resident-friendly: A characteristic of how likely your residents are to favor the billing method.