4 Ways to Reduce Multifamily Utility Expenses

Rising utility expenses pose a serious challenge to the profitability of multifamily properties. Property owners can bleed cash every month on unbilled utilities, creating a huge liability and decreasing NOI. In this post, we’ll break down four strategies to reduce multifamily utility expenses.

Be Vigilant About Leaks

Few things drive up utility expenses and crush bottom lines faster than utility leaks. Broken pipes between the master meter and unit can cause your property to lose thousands of dollars a month.

If you can identify and prevent leaks quickly, you’ll keep expenses from spiraling out of control. To detect them though, you’ll need data on your property’s utility consumption and the means to analyze it. Installing submeters will help you do this.

To detect a leak, you’ll need to compare your submeter and master meter data every month. If you notice that you’re not billing a portion of your bill, or that consumption spikes without explanation, you likely have a leak. This is common in mobile parks and any property with underground pipes. You’d then have the opportunity to improve cost recovery by repairing your water lines.

Because this involves a lot of monthly due diligence, many properties turn to utility companies to stay on top of leaks for them.

Give Tenants Direct Responsibility

Property owners that manage their own bills have a huge liability. A $50k utility bill is a huge expense you have to spend time recovering. If you can’t, your property will lose cash and cut five figures off your bottom line.

Fortunately, there’s an effective way to manage such a liability – share it with the tenant. Submetering makes tenants directly responsible for their own utilities. And once they’re responsible for them, tenants conserve utilities across the board. On average, tenants with submeters cut consumption by 35%.

By making tenants responsible for utilities and outsourcing billing to a billing company, you can significantly reduce the liability for your property.

Implement Green Initiatives

Once you’ve used utility billing strategies to reduce your property’s energy consumption, what else can you do? One useful strategy many landlords are implementing is turning to green initiatives.

Conserving utilities for environmentally-friendly purposes can help property managers reduce utility expenses. Your local municipality probably has green initiatives, strategies and resources for reducing energy consumption. Some of these approaches, like adding eco-friendly appliances or insulating windows, are easy to implement and can make an impact on overall consumption of utilities across the property. This reduces your overhead, saves tenants money and conserves energy.

Invest In Your Property

While the other methods can provide short-term cuts to your utility expenses, making investments in the property can provide long-term savings. There are two major ways to do this.

Similar to detecting leaks, landlords or billing companies can use a property’s utility data to identify a significant issue with the utility configuration. Investing time and energy into fixing the issue up front can solve problems before they cost you more money.

Another way to reduce your utility expenses is by installing submeters. Investing in submeters has a number of benefits, including reducing utility consumption, improving NOI and providing useful utilities data. Submeters typically pay for themselves in 6-12 months and reduce costs for a decade.

You can also further optimize your submeter deployment by streamlining your meter reading. AMR (automatic meter reading) devices automate the reading of data. This saves expenses on labor costs associated with manual reads and improves data on utility consumption.

There are many options for reducing long-term utility expenses and knowing where to invest in your property can be complex. This is exactly what a good utility billing company can help you do.


Managing utility expenses for multifamily properties can be challenging. But with the right tools and strategies, you can reduce your expenses and improve your bottom line.