What Is Water Submetering & Why Should Property Owners Consider It?

Water submetering helps multifamily property owners better recover water utility costs by accurately billing residents for water usage. In this blog, we explain what water submetering is and how it benefits multifamily property owners.

What Is Water Submetering?

Water submetering is a utility billing system where individual water meters measure the water use of individual units in any type of multifamily or multi-unit property. It involves installing water submeters in each unit space. This allows property owners and managers to accurately track each unit’s water usage and bill back water utility costs accordingly.

Why Should Property Owners Consider Submetering Water?

Water rates and usage fluctuate over time. Because water utilities are not a fixed cost, a flat fee will not perfectly cover expenses every month. When usage is higher or rates go up, the property owner usually pays the difference.

Unlike including utilities in the rent or charging a flat fee, water submetering systems ensure that each resident is paying their fair share of the water bill so that property owners aren’t paying out of pocket. This gets rid of a huge, variable expense for you and allows you to share it equitably with your residents, leading to many other benefits down the line.

Top 4 Benefits of Water Submetering

Benefit #1: Lower Operational Costs & Better NOI

When you’re able to fully recover water utility costs by billing back your residents, your water bill effectively becomes $0. When your property’s water bill goes down, your operational costs go down. When your operational costs go down, net operating income (NOI) goes up.

An increase in NOI is obviously valuable to every multifamily property owner, but it can be especially valuable for owners looking to sell their property. A multifamily property with water submeters installed is a much more appealing asset to multifamily property investors, strengthening your property value and position should you decide to sell.

Benefit #2: Reduced Water Consumption

When residents are billed for their actual water usage, they become more conscious of their consumption. That new responsibility often leads them to use less water, reducing water consumption across your entire multifamily property.

On top of lowering your overall water bill, decreasing water usage promotes sustainability and improves your property’s overall environmental footprint. In an environmentally conscious market, that is a valuable differentiator. Plus, these improvements allow you to leverage conservation programs.

Benefit #3: Improved Leak Detection

Water submeters collect a lot of data. That data allows you to monitor water usage in real-time, helping your team spot water usage trends.

A spike in usage can be an indication of a leak. With water submetering, you can easily identify location of the leak. Simply find the submeter with a high reading and trace back the leak from there.

This allows you to detect the leak faster and mitigate damage before it becomes a major, costly repair. It also makes sure your tenant isn’t overpaying due to a leak.

Benefit #4: Long-term ROI

While the installation of your water submeters comes with an up-front cost, that expenditure is usually recovered quickly. If you’ve been charging a flat fee for water utilities, you can typically recover the cost of your submeter installation through greater utility cost recovery in the first year of your system.

On top of that, submeters typically have a lifecycle of at least 10 years. That means your system will be providing added ROI for at least nine years.

How to Get Started with Water Submetering

Every multifamily property is unique. That means the process of transitioning to water submeters is unique.

While the specifics of a water submetering project may be unique, there are some general steps to ensure a smooth transition to water submetering, including:

• Ensuring your property can be submetered. Not every property is suitable for submetering. Your plumbing set up maybe such that it would be impossible to read usage for a single unit, making true submetering impractical.
• Building a communications plan to lay out the change for your residents. When transitioning to a water billback program, the resident experience needs to be at the forefront of the mind. That includes notifying them of the change and what it will mean for them well in advance.
• Working with a licensed water submeter installer. Water submeter installation is best left to reputable installers to ensure best results, so you can recover as much utility cost as possible.

Conclusion: Work with a Water Submetering Expert

Water submetering is a great way for multifamily property owners to fully recover water utility costs, but installing submeters and getting a utility billing system up and running can be a challenge. That’s why many property owners turn to a utility billing company.

The right utility services provider can help you at every step of the way – from system design to sourcing the right installer to ongoing billing and collection. This means your team can stay focused on their core competencies without the added work of utility billing, while you reap the benefits of water submetering.

Interested in seeing if water submetering is right for your multifamily property? Get in touch with Synergy Utility Billing. Our team can help you get started.