Guide to Utility Benchmarking for Multifamily Property Owners

Utility benchmarking provides multifamily property owners with valuable insights into the utility usage trends of their properties. In this blog, we explain the concept, why it matters and how it works – so you can ensure your properties remain energy efficient and profitable.

As you grow your multifamily property portfolio, managing utility usage becomes even more important. While the right utility billing system makes it possible to fully recover utility costs each month, this doesn’t address the problems associated with inefficient consumption or overconsumption.

That’s where tracking utility analytics and utility benchmarking come into play. If you want to lower utility usage and improve the efficiency and sustainability of your multifamily property portfolio to reduce expenses, you need to start benchmarking.

What Is Utility Benchmarking?

Utility benchmarking involves tracking and analyzing utility usage in your multifamily property or across your entire portfolio of multiple properties. This process helps you and your team of property managers:

• Identify inefficiencies
• Compare performance against similar properties
• Implement cost-saving measures.

The goal of utility benchmarking is to reduce operational expenses while enhancing sustainability.

Why Is Utility Benchmarking Important for Multifamily Properties?

Utility benchmarking is crucial for multifamily property owners because it provides valuable insights into their properties’ utility usage patterns. By tracking and analyzing utility data, you can identify inefficiencies and areas where resources are being wasted. Then, you can use that data to implement targeted improvements across your entire portfolio of properties.

Think about it this way: You can’t improve what you don’t measure.

As your multifamily property portfolio grows and you begin to invest in new properties, your goal is to ensure those investments are as profitable as they can be. The costs of inefficient utility usage in one building can add up quickly. As you add more doors to your portfolio, those costs will only go up if utility usage inefficiencies aren’t addressed.

While cost reduction is a major benefit, there’s more to utility benchmarking than cost savings alone. Here are the three main benefits multifamily property owners can expect when they start routinely benchmarking their properties.

The 3 Main Benefits of Utility Benchmarking

Benefit #1: Cost Savings

Benchmarking utility usage allows your team to understand how much energy your property normally uses. With this baseline in mind, you can then begin to find areas of excess energy and water usage. Quickly identifying and addressing these issues can significantly reduce utility expenses over time and increase the long-term health and sustainability of your property.

Common cost-saving investments to address issues found in utility benchmarking include:

• Fixing leaks
• Installing energy-efficient appliances
• Installing new windows

Benefit #2: Improved Property Value

Properties that are sustainable and energy-efficient are more attractive to tenants, buyers and investors. Especially in environmentally conscious markets, utility benchmarking data (and associated energy-efficient updates like windows and appliances) show a commitment to sustainability that can enhance your property’s marketability and overall value.

With a sustainable edge, tenants might be more willing to pay a premium for rent. And the more investments you make into your utility infrastructure, the higher price you can demand should you decide to sell.

Benefit #3: Compliance and Incentives

Many city and local governments require energy and utility usage reporting for multifamily properties. Utility benchmarking can help your team stay compliant with any regulations your building falls under.

Additionally, routine utility benchmarking can help your property qualify for government incentives, rebates and grants.

How to Begin Benchmarking Utilities

Getting started with utility benchmarking is relatively simple. There are many helpful resources that can get you started with utility benchmarking. Below are two of the most common, free resources.

• HUD’s Multifamily Utility Benchmarking Toolkit: This spreadsheet tool helps you gather necessary information and document decisions for utility benchmarking.
• ENERGY STAR Portfolio Manager: Created by the EPA, this tool helps you start tracking energy and water consumption, set greenhouse gas emissions goals and compare your building’s performance against national averages or other buildings in your portfolio.

Conclusion: The Right Utility Billing Provider Can Help You Get Started

Utility benchmarking allows you to assess your properties’ performance to identify areas of high usage or possible leaks. It also allows you to compare performance to similar properties. Benchmarking is a crucial process that allows you and your team to make data-driven decisions that save costs and increase property value.

However, you can only see the fruits of this labor if your team has time to do it. Managing a portfolio of properties is a lot of work. While there are free resources to help you get started, finding the time to do utility benchmarking may not be feasible. That’s where a utility billing provider can help. Partnering with the right utility billing provider can make utility benchmarking a breeze. They can give your team access to a suite of utility analytics, track trends and make recommendations on areas for improvements.

Have questions about your multifamily property’s utility usage? Get in touch with Synergy Utility Billing. Our experts are here to help.