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How You Can Afford to Retrofit Your Multifamily Property with Submeters

How You Can Afford to Retrofit Your Multifamily Property with Submeters
I’m embarrassed to admit how many plates of food I consumed the last time I dined at a buffet. It’s always the desserts that lure me in. Chocolate tortes, soft serve ice cream, cake… I will sample all.the.things. If it looks remotely sweet, it goes on my plate. If I try it and it doesn’t appeal to my sweet tooth, no big deal. After all, I’m not paying per item and I gotta get my money’s worth, right? If you spotted me at a regular restaurant where I was paying per item, I’d definitely be more mindful about overdoing it. Residents in multifamily properties who aren’t being held accountable for their utility consumption usually have the same gluttonous mindset that buffet diners do. If they aren’t being billed for their actual utility consumption, they are far less conservative with their usage. In fact, according to Fannie Mae’s Multifamily Energy & Water Market Research Survey, when apartment owners paid for all energy costs, median annual energy use was 26% higher than when tenants were held accountable for their usage. That’s why so many apartment operators (and lawmakers) are turning to submeters. Submeters precisely track each apartment unit’s utility consumption, allowing property management companies to accurately bill their residents for their share of the bill. Submeters are so effective at driving water conservation that drought-sensitive California recently passed a law requiring water meters to be installed at individual apartments starting with new developments in 2018. Even though the law doesn’t apply to existing multifamily structures, o......
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How to RUB your Residents

How to RUB your Residents
You’re out at a restaurant having dinner with several of your friends. The drinks are flowing, the conversation is engaging, and the food couldn’t be better. It’s a great time until the bill comes. The mood quickly changes as everyone tries to figure out how much money to pony up. Someone suggests splitting the check evenly, but that’s clearly not going over well with the person who only ordered a salad. Your vegetarian friend doesn’t want to pitch in for the table’s calamari, and a few of your friends didn’t drink any of the wine that was ordered for the group. Most likely, someone will leave for the night feeling like they paid for much more than they consumed. Divvying the utility bill for a multifamily property can be a lot like dining with a large group of friends. Fairly allocating the charges isn't always cut and dry. If you’re lucky, your property is equipped with submeters, which will give you a precise reading of what each unit is responsible for. However, submeters aren’t feasible at every property, which leads many property managers to use RUBS when allocating resident utilities. RUBS stands for Ratio Utility Billing System, and is a cost-effective and fair alternative to submeters. RUBS essentially divides a utility bill among your residents based on certain criteria. Different utility types can often influence what RUBS formula a property uses. If you are thinking about billing back for utilities and want to implement RUBS, here are the different calculations to consider. Occup......
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Utility Meters 101: How Your Property Management Company Can Recoup Utility Expenses

Utility Meters 101: How Your Property Management Company Can Recoup Utility Expenses
One of the top questions a prospective resident wants to know when they are interested in your property is, “Will I have to put any utilities in my name?” The answer is largely determined by how your property is metered, and ultimately, how you can recoup those utility expenses from residents. There are several ways a property manager can recoup utility expenses, so let me give you a breakdown of all the scenarios that are possible. In order to calculate what is owed for each utility, a reading must be obtained from your community’s applicable utility meter. Your property is metered in one of two ways: Direct metered: This means that there is one meter per utility type, per residential unit. Each meter is read by the utility provider. The utility provider is responsible for calculating those usage charges and billing them directly to your resident. In most cases, the property management company is only responsible for utility charges when the unit is vacant. Master metered: In master metered communities, there is one meter per utility type, per building. The utility charges for that community are billed directly to the property owner by the utility provider. From there, it is up to the property owner to determine how they wish to recoup those costs. Here’s how that can be done: Submeter Reads: In this instance, individual meters for each residential unit are installed behind the master meter. Those meters are monitored by the owners or the submeter vendor rather than the utility......
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All-Inclusive or Non-Inclusive: Which Option Is Best For Student Housing?

All-Inclusive or Non-Inclusive: Which Option Is Best For Student Housing?
For many first year students, on-campus housing is often seen as an ideal transition into independent living. Students can accept more responsibilities and independence, while still enjoying the luxuries of having mostly everything taken care of for them. The next stepping-stone for many students is the move into off-campus housing, where even more freedom and responsibilities are awarded to them. Typically, living off-campus is where students get their first real taste of complete independence. Students can choose one of two rental accommodations.  All-Inclusive: A rental accommodation where tenants do not pay their utility bills (electric, gas, sewer, water, etc. are paid for by the landlord and factored into the monthly rental rate).  Non-Inclusive: A rental accommodation where the tenants set-up and pay their utility bills. In most cases, students (specifically ones without much rental experience) will prefer all-inclusive rentals for a variety of reasons.  Less Hassle: Chances are, students have never had the opportunity to set-up utility accounts, aside from perhaps their cell phone. For many students, this can be unfamiliar territory filled with uncertainty. Some students would prefer the easy route of having everything bundled and set-up for them.  No Surprises: There’s a certain comfort in knowing exactly what is owed at the end of each month, especially for students. Living on a student budget can be tight and having to resourcefully budget for utility bills can be difficult; especially with varying due dates and fluctuating costs based on usage. Some students would prefer to just pay rent at the beginning of each m......
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2 Mistakes Student Housing Communities Make With Utilities (And How to Fix Them)

2 Mistakes Student Housing Communities Make With Utilities (And How to Fix Them)
Managing a student housing community comes with unique challenges. Beyond managing residents who have never lived on their own before, student properties have more operational complexities than a typical multifamily community. Take managing utility expenses, for example. What do property managers have to do to recoup these costs from students? There are two common mistakes student communities often fall prey to. The first is padding the price of rent to include utility expenses. Apartments that include utilities can be a good way to entice students. But predicting consumption and the ever-changing costs of these utilities is a guessing game that often ends up shortchanging the property manager. Another common pitfall is offering students a “utility allowance,” which caps the amount of utilities the rent will cover. Students are then billed back for any overage beyond their allowance. It might sound like a reasonable solution, but the amount of work this entails can be overwhelming for a property manager. Let’s say that a 500 unit community receives 1 invoice per unit from each municipality (water and electricity/gas). That’s at least 1,000 invoices every month that must be analyzed, billed back to residents, and then paid to the utility company. Student properties that rent by the bed instead of by the unit see an even bigger workload in this process. Most student housing property managers will tell you that their time would be better spent on anything else. This is why utility expense management solutions are becoming so popular among the student housing s......
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4 Ways Landlords Can Reduce Utility Costs Without Sacrificing Comfort

4 Ways Landlords Can Reduce Utility Costs Without Sacrificing Comfort
Landlords’ utility costs are heating up. Last year, U.S. water costs rose faster than nearly every other household expense. The ongoing California drought did little to dampen the visibility of water shortages, and many water distributors had no choice but to raise prices in accordance with demand. Cities across the nation are testing tiered pricing structures to distribute water fairly, but their battle is a testament to the struggles property managers face on a daily basis.   Water isn’t just outstripping other household costs, though — it’s beating the regular market by a wide margin. Excluding food and energy costs, the Consumer Price Index rose by 1.8 percent last year, while water costs rose by an average 6 percent. And during the past 30 years, water prices have actually increased faster than oil prices.   As if rising water costs weren’t already squeezing landlords, energy prices are also trending up. The cost of electricity will continue to climb and is expected to increase 18 percent by 2040. Although oil might be cheap today, demand for it and other energy resources is poised to skyrocket over the next decade and a half.   Landlord and facility management professionals aren’t expected to solve our growing resource crisis, but they do feel the sting of increasing utility prices more than most. For today’s landlords, the challenge is reducing utility expenditures while maintaining the level of comfort tenants have come to expect.   Drop Costs, Not Comfort   Every residential building, old and new, can make a few simple changes to wrangle utility costs, help the planet, and keep tenants ......
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Payments & Billing: A Property Manager’s Peanut Butter and Jelly

Payments & Billing: A Property Manager’s Peanut Butter and Jelly
Some things are meant to go together. Peanut butter and jelly. Cookies and milk. In the property management world, having online payment options for your residents is a good thing. But when paired with other services, like resident billing, the results can go from good to great. Not to mention that if you only offer online payments, you are (literally) leaving money on the table. Why? Because rent is only one of the expenses that residents are responsible for paying. What if you could create a single bill for your residents that in addition to rent, included their portion of the shared utility bills? Pet fees? Parking charges? The bill could be delivered to your residents either by paper, or more likely, electronically, with a quick link for them to go ahead and pay online. This is what the industry calls resident billing, a.k.a. NOI Heaven. Offering online payments without billing is like having peanut butter without jelly. Or movies without popcorn. Payments alone are good; but when combined with resident billing, the results are so much sweeter. Why wouldn’t you pursue resident billing? Here are the most common responses from property managers: Utilities are built into our rent. This is a common response. The problem is, in this age of conservation, consumption-based billing is better for you, better for your residents, and better for the environment. We don’t have submeters. No problem. By using a Ratio Utility Billing System (RUBs), you can bill back residents in a fair and defen......
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Fundamental Student Utilities

Fundamental Student Utilities
One of the great rites of passage in this country is the opportunity to amass a fair amount of debt in exchange for an education.  It’s that scar that will stay with you for years to come.  Luckily, while pursuing that education, people need a place to live.  Every college town in America is filled with apartment communities that cater specifically to the student lifestyle, but filling those beds isn’t always an easy task.  One of the more challenging juggling acts that occur at most properties is figuring out how to handle the rising utility costs, while staying competitive.  It’s not uncommon to see utilities incorporated into marketing strategies in one way or another, but there is often a lack of understanding of the financial risks and potential impacts on resident satisfaction that stem from the different approaches.  Below we’ll dive into a few common mistakes, and learn the best practices that can help protect your bottom line. Free Utilities Probably the most common marketing approach when it comes to utilities in the student housing industry is to promote them as being included with rent.  While it’s tempting to fall prey to this tactic, let’s talk about what this means for your property.  One of the basic premises of a utility bill back service is that if an individual is responsible for the cost of the utility, they’re more likely to conserve.  Where there is conservation, there is also cost savings.  Pretty simple, right?  The logical conclusion to this thought process is that if you remove th......
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“Baby It’s Cold Outside…” No Seriously, My Utilities Aren’t Working

“Baby It’s Cold Outside…” No Seriously, My Utilities Aren’t Working
Winter is here, and with winter comes an array of holiday, seasonal cheer. Housewarming music fills the radio, along with every decoration imaginable. With all the hot cocoa, pine cone wreaths, and sparkly trees, comes an expectation for comfortable living. I mean “comfortable living” in the sense that your heater works on your day off, because there is no better way to ruin holiday cheer than by anchoring yourself to a single spot on the couch with a mountain of blankets so high there are people forming a line to see what the view is like from the top. Addressing common utility issues that accompany cold weather now, rather than waiting until you're getting emergency maintenance calls at 2 a.m., ensures that your site staff gets to enjoy the holidays. Inform the Residents We all lived through the magic that was Frozen over the last year, but in order to avoid a similar experience for your residents, helping them understand some basic preventative maintenance can go a long way. While sub-freezing temperatures can lead to an increased risk of burst pipes, according to the Weather Channel1, 20 degrees is the magic number where the likelihood dramatically increases. But unlike Anna and the rest of Arendelle, you can teach your residents some tricks to help combat the freezing temperatures. Turning faucets on to a slow drip can help prevent pipes from freezing, and keeping thermostats at temperatures above 60 degrees, even when residents leave town, can help prevent frozen pipes as well. In add......
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University Students Researching Multifamily Energy Efficiency

University Students Researching Multifamily Energy Efficiency
Thanks in part to Nationwide Energy Partners, who service several mid-western and eastern US markets, college students from the University of Dayton have begun to study energy usage as it relates to multifamily buildings. Dr. Kevin Hallinan’s “Building Energy Informatics” study is rooted in the professor’s knowledge of mechanical and aeronautical engineering and the initial class of 35 students partaking in the summer program comprises mainly mathematics, engineering, computer science and economics majors looking to analyze the current data being produced from real world partner, Nationwide Energy. The hope is that through these studies, the students may discover untapped opportunities that can be leveraged to reduce both energy and water costs associated with multifamily dwelling. According to Dr. Hallinan, his program is on the ground floor of collecting and trending the current energy data being harvested. From the analysis of this data, there are a lot of hopes of discovering new and innovative ideas that can help to lower the costs for both multifamily building owners and their tenants. In addition to the cost factors, the study looks to provide some insights into supplies with the final goal of making green transitions easier to adopt. With five years’ worth of anonymous data to study, covering the electrical and water usage of 220 apartment units in Ohio, the Dayton students are now looking to identify patterns in the individual units with hopes that they can identify differences among diverse unit types. The program is currently studying whether shifting usage and other similar strategies can help to minimize ......
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