August 24, 2023
4 Ways Multifamily Property Owners Save on Utility Costs with Utility Billing
When left unchecked, variable utility costs can wreak havoc on the profitability of your multifamily properties. Here’s how a well-optimized utility billing system can help drive overall cost savings on utilities.
Managing rising utility costs is a constant challenge. As utility rates continue to increase, it’s important for landlords, property owners and investors to investigate cost-saving solutions.
A great place to start is by billing back utilities to your residents based on their usage. This can be done through submetering or a ratio utility billing system (RUBS). Both utility billing systems will help you recover a greater percentage of utility costs month to month, while at the same time reducing your overall utility bill. Here’s how.
4 Ways Billing Residents Back for Utilities Saves Landlords Money
#1. Billing residents puts the responsibility back on them.
When you include utilities in rent or bill it as a flat fee, nothing prevents your residents from overusing utilities. This overuse can inflate your property’s utility bill compared to what you charge your residents, which means you have to pay the difference. That extra outflow of cash can be the difference between building profitability or taking losses.
Billing residents back for their own usage gives them an incentive to control their consumption and lower their own monthly bill.
#2. Billing residents reduces overall utility consumption.
When residents are responsible for utility bills, they tend to drop their utility usage. It’s a win-win: Their bills will be lower, and you will fully recover utility costs every month. Why else does this matter?
A reduction in individual resident usage typically correlates with a reduction of usage across your entire multifamily property. The master meter bill for your building will be thousands less than before implementing a utility billing system. This means you can start taking advantage of green initiatives in your area.
Many state and local governments provide incentives to businesses that meet certain environmental standards. Lowering your building’s utility usage (and collecting the data to prove it) will enable you to take advantage of those incentives.
#3. Billing residents unlocks utility analytics that drive further improvements.
When you bill back utilities, you will start getting more detailed data on utility usage. Access to rich utility analytics will help you:
- Spot usage trends.
- Audit utility bills
- Detect possible leaks faster (leading to even more cost savings).
- Prioritize building improvement projects (like installing energy-efficient appliances or adjusting plumbing hardware to conserve water).
#4. Billing residents allows you to consolidate billing line items.
With a utility billing system (and the analytics it provides), you can take advantage of convergent billing.
Convergent billing is when a utility billing service includes all applicable resident charges – like non-metered utilities, trash collection, cable, internet and more – on a single bill. Consolidating resident expenses is helpful for your busy business, and it also improves the billing experience for your residents.
Nobody likes to pay a bill, but when the payment experience is as easy as possible, you ensure more residents pay their bills on time and in full. A few other strategies to ensure residents pay their bills include:
- Making sure bills are fair and defensible – This will lead to fewer questions and payment holdouts from residents.
- Sending bills out at a consistent and predictable cadence – This allows residents to plan their monthly expenses in advance without any surprises.
- Providing residents with a variety of ways to pay their bills – Whether it’s by credit card, check or automatic withdrawal, by mail, phone or online payment portal, giving people options lets them pay how they are most comfortable.
These strategies lead to more bills being paid on time and in full, lowering your utility costs and increasing your cashflow. With these savings, you have more flexibility to invest in your property and cover other expenses.
Conclusion: Start Saving with a Utility Billing Provider
If you want to start saving on your multifamily property’s utility costs, billing back utilities is a great way to start. However, before deciding to implement and manage that utility billing system in-house, consider working with a utility billing company.
A utility billing company will have the knowledge to help you through every step of the process – from initial site audits and feasibility studies to installation, to resident billing and collections. When done in-house, these tasks only add to your team’s workload, and you run the risk of leaving potential savings on the table.
Working with a utility billing company will ensure your utility billing system is optimized for cost recovery and decreasing your overall utility consumption.
Looking to reduce your multifamily utility bills? Get in touch with Synergy today. We’re happy to help.