January 5, 2023
Investing in New Property? Don’t Skip a Utility Billing System Audit
As you expand your property investment portfolio, you will also have to follow a due diligence process on each new investment. If you’re not looking at the utility billing system in that process, you should be. Here’s why.
There are plenty of property investment due diligence checklists out there to help investors make a wise investment. But there’s often one big gap on these lists: a utility billing system audit.
This is not something you want to overlook. A faulty utility billing system – one that takes inaccurate reads, for example – can cost you in the long run. Here’s what a utility billing audit step involves and how it helps you.
What is a Utility Billing System Audit?
A utility billing system audit is a process where a professional inspects the utility hardware (master meters, submeters, wiring and pipes) to make sure it is working properly and capturing a full read for its intended billing area.
Why is it Crucial to Inspect Your Utility System?
With commercial or residential property investments, it’s important to have a full picture of what you’re investing in. Specifically, the utility billing infrastructure has a big impact on your overall net operating income (NOI).
This is especially true for commercial properties where it’s common for a unit to be frequently divided and subdivided. This process, when done incorrectly, can risk affecting the ability to get a full and accurate utility read on each unit. It’s important to inspect your utility system to make sure you can fully measure usage and bill back that cost to the tenants.
The bottom line: By glossing over the utility billing system audit, you could end up with a system that could ruin the NOI of the property.
The Benefits of a Utility Billing System Audit
Benefit #1: Know What You’re Investing In
Buying multifamily or commercial property is a major investment. While a faulty utility billing system may not be a make-or-break factor in the ultimate decision to purchase a property, it’s still helpful to know what you’re working with so you can form a plan to fully recover utility costs once you take ownership of the building.
Benefit #2: Ensure Full Utility Cost Recovery Month to Month
Utility costs have been steadily rising over the past few years, and that trend will continue. If you have a utility billing system that accurately reads each unit’s usage, allowing you to bill back your tenants accurately, then you don’t have to worry about that rising cost.
A utility billing system audit is the first step to making sure that everything is working properly. Or it lets you know what you need to fix to ensure that you are recovering that cost.
Benefit #3: Start Working with a Utility Billing Expert
To perform a utility billing audit, your best bet is to work with a utility billing expert. They will know exactly what to look for and how to solve any problems.
Plus, starting a working relationship with a utility billing expert is a great idea – especially as you continue to expand your investment portfolio. While it is possible to handle utility billing in house, most management groups and property owners find that they simply don’t have the time to take care of it. A utility billing expert can take utility billing completely off your and your management team’s plate.
It pays in the long run to have a partner who can not only generate bills on time and accurately but also use industry best practices to ensure that your billing system is recovering as much cost as possible.
Before you invest in another commercial or residential property, make sure to add a utility billing system audit to your due diligence process. Ensuring your utility billing system can get a full read for accurate billing is the first step to fully recovering cost and maintaining the value of your investment.
Have issues with a utility billing system on a recent or pending property investment? Reach out to Synergy Utility Billing. We can help get you get your system running properly and maintain it with accurate and timely utility bills throughout the life of your investment.