Boosting NOI by Billing Back Utilities: 5 Benefits of Working with a Utility Expert

Every property manager knows that one of the most critical functions of their job is to increase net operating income (NOI). In this blog, we explore the benefits of billing back utilities to your residents to boost your property’s NOI – and provide an overview on how to do this with the help of a third-party utility billing provider.

Net operating income (NOI) is a simple calculation used to assess a property’s profitability by taking the total income and subtracting that value by the total operating expenses.

Calculating NOI is simple. But increasing NOI is easier said than done. There are strategies that landlords and property managers can do to try to increase income, including decreasing vacancies, mitigating tenant turnover and increasing tenant satisfaction.

Maybe the most obvious answer to increasing income is increasing rent. However, there is only so much you can raise rent by without driving away your residents and making your property less competitive.

Most landlords find that a better way to boost NOI is to decrease expenses. One area of expense you can look to decrease is utilities.

Utilities are a sizeable expense each month for many property owners. The good news is that expense can be more efficiently managed by billing back utilities to residents – so long as you set up a utility billing system the right way.

Working with a Utility Expert to Bill Back Utilities: 5 Benefits

It is possible to handle a utility billing system in-house, but it’s a massive undertaking. On top of that, there are considerations to be made every step of the way that can impact the ultimate effectiveness of your utility billing system.

From system design to bill generation, working with an expert can help you get the most out of your utility billing system, effectively lowering your costs and increasing your NOI.

Here are five benefits an expert-backed utility billing system can give you.

#1) Accurate and Timely Billing

A utility billing system is more than just being able to read, bill and collect expenses on time. However, that is an important part of it.

Having a system in place to read meters accurately and bill residents on time will help increase the overall experience for your residents. Nobody likes to receive a bill but working with an expert can help make that experience as easy as possible for your residents.

#2) High Collection Rate

With an expertly delivered and managed utility billing system, you can ensure high collection rates. Proper utility billing is determined by a mix of logistical and psychological factors, but put simply, a utility billing expert will always ask the question “What can I do to make sure this bill gets paid reliably on time?”

Working with an expert can ensure your billing method follows best practices for generating defensible bills and sending them out at a predictable cadence with great customer service.

#3) Access to Real-Time Metrics

Make the most of your utility billing system with real-time metrics. A utility billing expert can help you get 24/7 access to useful usage metrics, so you can see where you might need to optimize your billing system.

With access to real-time metrics, property managers can quickly detect when usage is spiking, which could indicate a leak. Being able to spot and solve a problem quickly can save you a lot of money in the long run.

#4) Decrease in Overall Usage

One of the less talked about benefits of billing back utilities is that it tends to decrease overall utility usage. When utilities are baked into the rent, your residents usually aren’t prudent with their utility consumption each month.

When you bill back your residents, you give them insights into and control over their actual usage, encouraging them to save money and decrease their overall usage. This, in turn, helps lessen your master meter bill each month.

#5) Greater Flexibility and Cashflow

Billing back and collecting utilities also allows for greater cashflow and flexibility. If you’ve never billed back utilities to your residents before, now you’ll have another line of cashflow each month. This can mean a lot in terms of flexibility should unexpected expenses arise.

How to Bill Utilities Back to Residents

The benefits of billing back utilities to residents are clear. So, how is it actually accomplished? There are two main ways to go about billing back residents – RUBS and submetering.


Ratio utility billing system, or RUBS for short, is a billing method that proportionally allocates utility costs to tenants using an industry-accepted formula that takes into account unit size, layout occupancy and more. RUBS can be used to allocate the cost of water, gas, electric and other utilities.

RUBS is a great way to start billing back your residents, but if your property allows for it, there is a more favorable method: submetering.


Utility submetering lets property owners measure each unit’s true consumption of water, gas and electric and bill back that usage accurately.

You can do this by installing a meter between the master meter and each resident’s unit. These are the submeters, and they provide precise consumption data so landlords can bill back tenants for exactly what they consume.

Installing submeters and setting up a utility billing system is a big project to take on, especially when you consider all the other parts of managing a multifamily property. To do it right, you will find working with an expert helpful.


An expertly implemented and maintained utility billing system can do a lot to decrease your monthly costs, increase your NOI and provide a huge amount of ROI over the lifetime of your system.

Talk to the utility billing experts at Synergy to see how you can start increasing your NOI by setting up a utility billing system. Give us a call.