June 24, 2022
Submetering in New Building Construction: 4 Benefits
Constructing a new multifamily property is a major – and sometimes daunting – project. With so many other priorities and moving parts, utility billing can get lost in the shuffle. In this blog, we describe the benefits and process of submetering in new construction, so you can easily cross utility billing off your list.
As a landlord, a new construction project is a big undertaking. There are a lot of pieces to juggle as you seek to complete the project on time and under budget. One of those pieces being how you plan to bill utilities to your residents in your new building – which is usually one of the last things on your to-do list.
The good news is most builders and contractors include plans for submetering in new multifamily construction in states where submetering is legal. Here’s why you should plan to install a submetering system during construction and how that process works.
Submetering in New Construction: 4 Benefits
First thing’s first: What is submetering?
Submetering is a utility system that allows property owners and managers to allocate utility costs fairly among residents by measuring each unit’s true consumption of a utility.
This is different from using a master meter, which measures the utility usage for the entire building.
With a submetering arrangement, each unit has its own utility meter beyond the master meter. This allows you to get exact readings on each unit’s utility consumption. With this information, you can generate accurate bills for each of your residents, ensuring you recover your utility costs each month.
Installing a submetering system in your new construction comes with plenty of benefits – not only during installation but also throughout the life of your building.
#1. Lower Installation Costs
Installing a submetering system during new construction is much easier and cost-effective compared to retrofitting a new submetering system into existing building infrastructure.
In addition to saving you time and money at the frontend, it also allows you to capture accurate utility usage reads on each unit as soon as residents move in – maximizing cost recovery.
#2. Better System Design
When you install your submeters during construction, you’re able to design your building and submetering system in tandem. This ensures that your system is designed to fit the exact specification of your building.
It also allows you to incorporate easy access to your submeters should you need to repair or replace them years down the line, making system upkeep much easier.
#3. Accurate Billing Based on Usage
With a submetering system, you’re able to bill back utilities to your residents based on their actual usage. This incentivizes residents to use less because they know how much energy they’re using and have full responsibility over the bill. That responsibility can cause them to conserve, which will further lower the overall costs for your building.
#4. Better Cost Recovery & Return on Investment
Utility costs vary from month to month. So, a submetering arrangement that allows you to bill back accurate bills is preferable to including utilities in the rent or as a flat utility fee.
With a flat fee, you run the risk of not recovering those utility costs. This can severely impact your building’s profitability. Recovering utility costs month-to-month helps to ensure that your building can remain profitable, and fair and accurate bills are more likely to be budgeted for and paid on time by your residents.
How Submetering Works in New Construction
The benefits of submetering in construction are clear. So, how do you do it?
The sooner you start planning out your submetering arrangement, the better. As mentioned, it’s much cheaper, easier and faster to install a submetering system during construction rather than retrofitting after the fact.
Working with a submetering expert is a great way to ensure your system is properly installed and ready to capture reads as soon as your residents move in. A submetering expert can design the submetering system that works best for your building.
When you work with a submetering expert on your new construction, the installation process is relatively easy and can be done without any disruption.
Your contractor and builders can plan out the building as normal. As the pipes and electrical wiring are laid out, the submetering expert will send the proper spacers and placeholder parts to the site. Once the building infrastructure is in place, a technician can go in and replace those spacers with the actual submeters.
Don’t let your utility billing system get lost in the shuffle of your new construction. Plan out your new submetering system from the start, and you’ll be set up for accurate utility billing and full cost recovery for the life of your building.
Looking for advice on setting up your submetering system in your new construction? Talk to one of our submetering experts. We’ll be happy to help.