As a landlord or property owner for a commercial or residential building, it can be very difficult to know what investments in the property can actually have a cost benefit over time. While structural improvements are obvious, adding specific services such as utility submetering may be more challenging to see as a cost-effective investment.
To understand the benefits of utility submetering, it is first essential to understand the issues associated with the more traditional method of billing. Ratio utility billing is commonly used for multifamily residential properties as well as commercial buildings. It uses a formula based on square footage or occupancy, with most formulas using a combination of both.
However, this is not an accurate system by actual use of water or other utility. In fact, the heaviest users actually save money while the units with lower water usage will end up paying more. Moving to submetering systems allows for each unit to pay only for their use.
The Cost Advantages to the Property Owner
There is an initial cost to utility submetering, including the purchase and installation of the water meters. By installing smart meters, there is no need to manually read the meters, while also providing easy visibility through secure online portals to understand water usage patterns and daily variations.
With this information, a property owner or manager can quickly detect any usually high-volume water or utility usage. This can be an indication of a leak in the plumbing system, a tap or toilet that is running or even illegal occupancy or use of the unit. When these issues are detected early, costly damage can be avoided.
In addition, the ability to market the property as having submetering in place is a benefit to any residential or commercial property. Prospective tenants see the value in this type of billing, which can help to reduce vacancy rates and boost income from the property.