Submetering is the process through which costs for specific utility usage can be transferred to individual tenants in properties with multiple units.
The process entails the installation of a metering system in each unit of the property. Utility meters such as gas meters, water meters, electric meters, or meters pertaining to other specialty utilities alongside an Automated Meter Reading (AMR) system makes up a modern submetering system. This system will enable remote monitoring and reading of meters without assistance from a third-party billing company.
The most novel and valuable feature of sub meters is that it will not necessitate dependence on an outside third-party billing company for sending bills to tenants every month. Employing a submetering facility will allow the property owner to extend the submeter utility usage to each unit. The system is singularly affordable and gives considerable autonomy to the property owner to create and distribute charges to tenants if they choose.
Why Use DIY Submetering Against Third-Party Billing Companies?
Until recent times, monthly utility billing would generally be calculated and provided by local and national companies. These companies would charge individual residents based on the results of an installed submetering system.
Alternatively, companies would also use Ratio Billing System (RUBS), a method that divides up the utility costs percentage to tenants based on a predetermined formula.
Using a third-party billing company might seem convenient in some instances but is entirely redundant given the current technological advancement, making DIY sub meters possible.
Data surveys show that when tenants pay for their utilities directly without mediation from a third party, the cumulative utility charges at the property may drop up to 30% within a couple of months. This would increase the net operating income for the landlord in the proportion of utility costs transferred to residents.
Utility Billing Systems can Prove Useful in Other Ways Too:
● Small-sized Properties:
Many third-party billing companies shirk from providing services to small multi-unit properties. Sometimes as much as a hundred unit property is required to fetch the attention of billing providers. Such a hassle can be easily avoided through this new facility, where small property owners can monitor the consumption data from their submetering system and directly pass on the utility charges to their tenants.
● Incentives for Utility Conservation:
Multi-unit properties serving low-income communities often refrain from charging their tenants an entire utility bill. Property owners can benefit from installing a submetering system that can provide incentives for residents to conserve with such an arrangement. They also have the function of alerting tenants to automated leak detection so that leaking toilets may be immediately fixed.
● In Cases of Low Utility Usage or Infrequent Billing:
Suppose the landlord wants to charge residents annually for the cost of natural gas in a fireplace only. In that case, they can gather these charges in-house from the available data in the gas submetering system. Residents may be billed quarterly or annually, through whichever period the owner may decide
Irrespective of the specifics of property size- whether a property is a duplex or a 400 unit high rise, installing a submetering system will encourage tenants towards conservation since they would be obliged to pay directly for what they would be using.
Moreover, sub meters installations are affordable and offer a quick ROI throughout a year or less. By cutting off dependence on third-party billing providers, the overall process provides numerous benefits.