Philadelphia, PA · Member since 2010 · 64 posts · 34 votes
I found several old forums related to this but none that seem to answer mine and likely many other landlord's needs and I am hopeful that there is some newer technology that can provide a solution.
I have several smaller multi-family properties with split utilities but a common water meter (4-7 units). For one of my properties, the most recent bill equated to $283/unit/month in a building with average rent of $800/month. I suspect that it is 1 or 2 tenants in particular that have toilets running constantly and/or are just abusing the fact that they don't have to pay for water.
Are there any options for sub-metering the water bills to individual apartments?
These are old buildings so the plumbing is probably not a direct run from the basement, so I would ideally need to measure water in at the point of use. In most cases, they have separate hot water heaters, so I could just monitor how much hot water is used per apartment and take that % of the entire bill, this will not be exact so may cause other issues.
Any suggestions and ideally specific products for this or a company in South Jersey (Camden County) that does this would be great.
I recently contacted a company that was a sponsor of the BP Podcast -
truesubmeter.com. Here is their response when I asked for some information:
I will give you a bunch of information to get started but to get you accurate pricing we would need to know the plumbing configuration. How many hot water heaters each? I will explain more below. Once we have that info I can get you a formal quote. We have main line submeters that can install on the water line going direct to each unit if plumbing is separated. That is the ideal situation as you only need one meter. Not everyone is so fortunate. Here is a break down on that option and our point of use option:
Pricing for the whole system of the plug and play meters and routers run anywhere from $60 per apartment unit if the plumbing is separated. This is obviously the best case scenario. That is a ¾” meter and what we call the “main line meter”. The best way to determine if it is split is how many hot water heaters are there? One per unit? It might be on one city meter but the plumbing may be split and we could use one of our meters per side.
If hot water heaters are shared then we have to go to the next option. When it is not split meters are still in the $50-60 price range each, so if you need 6 meters (per point hot and cold) $300 per apartment. We call these under the sink meters the "point of use meters". These are our claim to fame meters as they are innovative and quite unique in the market. Even at $300 we still see an ROI of 9 months or less, generally. Did you see the ROI calculator? . Attached is a flyer that shows a worst case, point of use meters configuration and pricing example for that. This is the option you reference but if we can go with the single main line meters it is preferred. One router is required per building, not per unit. The routers run around $150.
As for the monthly monitoring cost from us, that is easier as it is a fixed per apartment and not dependent on how many meters you have. We charge $5.90 per month per apartment. So a 10 unit apartment complex would cost $59.00 per month. That fee includes everything such as private database, real time water logging, Verizon cellular monthly service (we pay this so you do not have to have internet in the property) and the automated monthly water billing that goes direct to the tenant. There is really nothing you need to do other than collect the money each month. We do everything for you in order to make passing on the water bill as hassle free as possible. We take whatever the local water/sewer rates are and basically use those to set up your account. Then every month when the automated water bill is generated and sent to each tenant it is identical to the pricing structure you city charges. All fixed fees and per gallons fees can be billed back.
Water bill is automatically generated and either automatically emails direct to the tenant or landlord/property manager (however set up). Or can be available as a PDF from your private login. The water bill is generated at the end of every month as a set period and send on the 1st of the month. At this time it is not configurable due to keeping it simple as some states require it to be based on a calendar month.
Batteries last on average 2 years. They are standard AA batteries, so nothing proprietary.
Let me know if you’d like a more formal quote. Attached is a couple of flyer pages and example invoice that is automatically sent to each individual tenant at the end of every month.
Thanks again for reaching out to us! We look forward to working with you. Help me confirm the plumbing options in the first paragraph and I will get you a quote today!
Philadelphia, PA · Member since 2010 · 64 posts · 34 votes
8y
Thanks Kurt and Chris -- really wanted to do something other than RUBS since I don't think it encourages tenants to conserve and can end up being unfair to some tenants who are but if that's the only option then that'll have to be what I do.
Chris, I sent in info to Guardian and I saw notes about submetering being illegal and then also something about only allowed for water. After posting this question, I also sent a note to my landlord/tenant attorney so I make sure that I don't waste time on options that I can't ultimately implement. I'll let you know if I find out anything useful.
Investor · Milwaukee, WI · Member since 2014 · 811 posts · 420 votes
8y
I would first do inspections of the buildings to make sure there are no obvious leaks, running toilets, etc. Maybe implement coin operated washer and dryer as well if that’s feasible.
Real Estate Investor · Smithtown, NY · Member since 2013 · 65 posts · 26 votes
8y
I second Darren's comment to do inspection and minor repairs. Replace all toilet flapper, faucet washers, etc. Maybe even low flow shower heads and aerators. It's crazy how much water a little drip will waste. We saved over $10k a year on our water bill at one property by doing shower heads and flapper replacements.
Philadelphia, PA · Member since 2010 · 64 posts · 34 votes
8y
Darren thanks for input and we will be doing that. Plan is to replace all toilets and shower heads with low flow during tenant turnover but we might accelerate that process. But regardless, if I can find a way to easily measure and bill back for actual use, it'll prevent a lot of issues. If tenants are paying for it, I'm sure they will let us know when there is an issue.
Philadelphia, PA · Member since 2010 · 64 posts · 34 votes
8y
Spoke with my attorney and I cannot do RUBS but I can bill back for what I am able to measure. All of the meters that I've found require a single main supply to the apartment and plumbing in these old buildings is not so simple and re-plumbing it would not be easy. Do small point of use meters exist where I could install at every fixture? Even without over-use bills are $800+ per year per apartment so for my 6-unit, It could still save me $5k/year.
Flipper · Albuquerque, NM · Member since 2017 · 24 posts · 8 votes
8y
Here its saying submetering in NJ is illegal for profit. The term is check metering there and looks legal. (From a vendor site so further investigation needed)
Rental Property Investor · Scottsdale, AZ · Member since 2016 · 184 posts · 223 votes
8y
@Dan Bosak : there are companies that specialize in sub-metering apartment buildings. Just google for "apartment water submeter Philadelphia" and start calling. :)
They usually have a couple of general business models: either smaller up-front-fee for the meter installation with a recurring fee for reading and billing, or a one-time charge for installation, and reading/billing is up to you.
as already mentioned, it's actually illegal to sub-meter at a profit in some jurisdictions. Another consideration is that often-times the landlord is still on the hook for the water-bill even if a bill is sent to the tenant. Depending on the type of tenants, they may be less likely to pay a water bill from a random 3rd party company, especially after they discover there is really no recourse.
A more effective strategy would be to include the water line-item on the monthly rent bill, so it's very apparent it's going to the land-lord, and there is as much expectation that they pay that line-item as there is to pay the rent. However, depending on the local laws, you may not be able to evict based on a refusal to pay the water. So, keep in mind that even if you are able to measure, you may still not be able to collect. You know your tenant best, so you can make that prediction.
I hope that helps and please report back on what you find!
Investor · Waconia, MN · Member since 2014 · 238 posts · 104 votes
8y
@Dan Bosak full disclosure to start, I own a submetering company but am also a RE investor and have done both RUBS and submetering prior to owning the company. Wanted to chime in mainly in response with what @James Kojo mentioned above. He is absolutely right! Tenants are much more likely to pay the utility payments to you, landlord or property manager as they do rent. We offer both options where tenant can pay us or pay you but there seems to be a lot more late payers, non payers and just general chasing people to pay when they pay a third party. Highly recommend that they pay you as they do rent.
Finally, as for laws, every state is different but I think you received great advice already from your attorney. Most every state allows submetering, some are more strict than others such as CA, but all require that you cannot profit from it. What they mean by profit from it is charge above and beyond what the local municipality/utility charges. If you charge more then you become a utility provider in itself. If you charge the same or less you are not profiting from it, just passing the costs on.
Specialist · "We're here to answer your sub-metering questions" · Member since 2017 · 17 posts · 5 votes
8y
Hello,
The primary reason why an owner sub-meters their Multi-family property: Based on our 20 + years of sub metering experience throughout the US, …Unlike RUBs (charging water/sewer based on hot water ratio consumption, occupants, fixtures or size of the home) were the conservation factor is often short lived ; The tenants’ water/sewer usage will drop by 25 to 35% when the tenants are responsible for their own water use; As an owner you will be promoting water conservation and working with your residents to mitigate future rental increases, as the water/sewer costs are no longer a rental component.
We’re here to answer your water sub-metering questions.
Rental Property Investor · Mesa, AZ · Member since 2016 · 101 posts · 72 votes
8y
@Derek Persuit I currently own a 4 unit MFR that has individual meters for each unit for water and electric but I'm looking into purchasing another 4 unit MFR but it happens to have a master meter for water. That's why I'm learning about the differences between sub-metering or instituting RUBS.
A ratio utility billing system or RUBS billing is a method of calculating a resident's utility bill based on occupancy, apartment square footage, number of beds, or some combination of factors.
Using RUBS to bill residents for water, gas and/or electricity expenses has several advantages including:
- Requires no capital investment to get started
- Enables owners to recoup a large portion of the overall utility expense
"Easy Example: Say we manage a 2 family with 6 tenants/residents in total: 4 people living upstairs in Unit 2, and 2 people living downstairs in Unit 1:
If January's water bill for the whole building is $100, then
February's Rent for Top Floor Unit 2 would have an extra $100 x 4/6th (or 2/3 rds) added on = $66.66
February's Rent for Bottom Floor Unit 1 would have an extra $100 x 2/6th (or 1/3 rds) added on = $33.33
I always send each Tenant a copy of the entire building's Water bill, plus a cover page with a detailed explanation of the billing-breakdown."
Originally posted by @Tracy J. Adkins:I work with the company attached in this comment..NJ now just passed that you can use RUBS!
Here its saying submetering in NJ is illegal for profit. The term is check metering there and looks legal. (From a vendor site so further investigation needed)
Originally posted by @Derek Persuit: RUBS is the allocation of a master utility bill (water/sewer, electric, gas, etc.)t o your tenants. #rd party companies do so by using an algorithm that considered both the square footage of the units, but also the occupancy...
I recently contacted a company that was a sponsor of the BP Podcast -
truesubmeter.com. Here is their response when I asked for some information:
I will give you a bunch of information to get started but to get you accurate pricing we would need to know the plumbing configuration. How many hot water heaters each? I will explain more below. Once we have that info I can get you a formal quote. We have main line submeters that can install on the water line going direct to each unit if plumbing is separated. That is the ideal situation as you only need one meter. Not everyone is so fortunate. Here is a break down on that option and our point of use option:
Pricing for the whole system of the plug and play meters and routers run anywhere from $60 per apartment unit if the plumbing is separated. This is obviously the best case scenario. That is a ¾” meter and what we call the “main line meter”. The best way to determine if it is split is how many hot water heaters are there? One per unit? It might be on one city meter but the plumbing may be split and we could use one of our meters per side.
If hot water heaters are shared then we have to go to the next option. When it is not split meters are still in the $50-60 price range each, so if you need 6 meters (per point hot and cold) $300 per apartment. We call these under the sink meters the "point of use meters". These are our claim to fame meters as they are innovative and quite unique in the market. Even at $300 we still see an ROI of 9 months or less, generally. Did you see the ROI calculator? . Attached is a flyer that shows a worst case, point of use meters configuration and pricing example for that. This is the option you reference but if we can go with the single main line meters it is preferred. One router is required per building, not per unit. The routers run around $150.
As for the monthly monitoring cost from us, that is easier as it is a fixed per apartment and not dependent on how many meters you have. We charge $5.90 per month per apartment. So a 10 unit apartment complex would cost $59.00 per month. That fee includes everything such as private database, real time water logging, Verizon cellular monthly service (we pay this so you do not have to have internet in the property) and the automated monthly water billing that goes direct to the tenant. There is really nothing you need to do other than collect the money each month. We do everything for you in order to make passing on the water bill as hassle free as possible. We take whatever the local water/sewer rates are and basically use those to set up your account. Then every month when the automated water bill is generated and sent to each tenant it is identical to the pricing structure you city charges. All fixed fees and per gallons fees can be billed back.
Water bill is automatically generated and either automatically emails direct to the tenant or landlord/property manager (however set up). Or can be available as a PDF from your private login. The water bill is generated at the end of every month as a set period and send on the 1st of the month. At this time it is not configurable due to keeping it simple as some states require it to be based on a calendar month.
Batteries last on average 2 years. They are standard AA batteries, so nothing proprietary.
Let me know if you’d like a more formal quote. Attached is a couple of flyer pages and example invoice that is automatically sent to each individual tenant at the end of every month.
Thanks again for reaching out to us! We look forward to working with you. Help me confirm the plumbing options in the first paragraph and I will get you a quote today!