Costs are 20% higher and energy usage is 30% greater in multifamily buildings when the building owner is on the hook for utility bills – and not the tenant.

A nationwide energy benchmarking company recently concluded a study which uncovered these staggering figures with data from over 3,000 apartment buildings. Apparently, when it’s not coming out of their pockets monthly, tenants aren’t concerned with when they do laundry, crank up the heat or if they leave the lights on. So by including utility charges in your tenants’ fixed lease price, tenants feel free to act as if they’re at an all-you-can-eat buffet; over indulging to make sure they get their monies worth. This leaves building owners at risk, paying a premium for careless energy use, as well as the added cost of utility rate increases.

When tenants are held accountable for their energy use and pay for it directly, they consume less, and more responsibly. In fact, it was found that tenant utility paid buildings not only start the heating season later, but they tend to set their thermostats lower, as well.

But what can an owner do when sub-metering is not an option?

One way to mitigate the ‘buffet table’ mentality is to bill through Ratio Utility Billing Services (RUBS); a billing method that provides individual calculations of a resident’s utility bill based on a combination of factors, including square footage and occupancy.

This multifamily energy expense management system accurately allocates and bills tenants, not just for electric and natural gas charges – but for water, cable, HVAC, trash, recycling and parking fees, as well.

Owners now have the ability to deal with utility rate increases in a more timely fashion, instead of waiting for a tenant’s lease to come up for renewal.

Improve your net operating income and keep rental rates consistent with local market conditions.Contact AUS to get started.