August 23, 2022
Utility Billing in Uncertain Economic Times: 3 Helpful Steps Landlords Can Take
Market experts warn that an economic slowdown is likely to happen soon. In this blog post, we discuss three steps landlords can take with their utility billing to make sure their properties remain profitable during a recession.
With inflation and supply chain issues looming, it’s harder than ever for landlords to find reliable service partners who can help create efficiencies and cost savings in their business.
Luckily, there’s one area that landlords can reevaluate: utility billing.
What Should Landlords Do During Uncertain Times? 3 Steps
Landlords need to simplify everything that they can to reduce costs and keep tenants happy. That means making processes more efficient and unloading lower-priority tasks, so you can focus on higher-priority work. Here are some ways you can do that with utility billing.
#1. Keep Your Rent Competitive
Many landlords assume that to stay competitive in tough market conditions, they need to include utilities as a flat fee in rent.
In the short term, this might work. However, utility rates rise and tenant usage varies, which means you will likely not cover all of your costs with that flat rate.
The best way to keep your costs under control is to bill back tenants for utilities. This will allow you to keep your rent more consistent (instead of increasing, even more, every year to make up for rising utility rates). Frequent rent increases frustrate tenants and make your property less competitive with the market. Plus, billing back utilities will make tenants more conscious of their consumption and even encourage conservation.
When you remove utilities from the rent rate equation, you have better visibility into your rent rates compared to the competition. While you most likely can’t afford to lower your rents, you might be able to keep them below the rate of inflation – taking some burden off your tenants.
#2. Make Utility Billing Easy for Residents
The next thing landlords can do to make sure they are ready for challenging times is make utility billing easy for their tenants.
Nobody wants to get a bill; however, there are ways to make sure your billing process is as user friendly as possible. It starts with making sure your bills are fair, accurate and sent at a predictable cadence. Then, consider the following tips for a better experience:
- Offer a variety of payment options
- Have customer service representatives on hand to answer billing questions
- Deliver bills on paper or virtually depending on tenant preference.
- Offer digital tools that let tenants view usage and past bills
The combination of the above two steps will help reduce tenant turnover and unpredictable utility costs. This allows you to focus on other rising costs that impact your profitability.
#3. Work with a Utility Billing Provider
The first two steps can be greatly streamlined by outsourcing your utility billing efforts. It is possible to handle utility billing in-house, but it can be an undertaking that you or your property management company won’t have time for. From system design to bill generation, working with a utility billing company can help you lower costs, increase NOI and get the time back to focus on higher-priority tasks. Here’s how.
Accurate & Timely Billing
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.
Higher Collection Rates
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. A utility billing expert will always ask the question “What can I do to make sure this bill gets paid reliably on time?”
Access to Real-Time Metrics
A utility billing expert can help you get 24/7 access to useful usage metrics. This access allows property managers to fully optimize their billing system and quickly detect when usage is spiking. Being able to spot and solve a problem quickly can save you a lot of money in the long run.
Decrease in Overall Usage
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.
Greater Flexibility & 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. In challenging economic conditions, that extra cashflow can be the difference between profitability and taking losses.
Conclusion: Take Utility Billing Off Your List
If you’re not already, working with a utility billing expert is a great step to take to make sure your property remains profitable during tough economic conditions. A partnership with a utility billing expert can take utilities completely off your plate, while at the same time making sure you’re not dealing with unpredictable costs each month.
If you want to ensure you’re recovering every bit of your utility cost in these uncertain times, then talk to a utility billing expert at Synergy. Get in touch with us today.