There are many ways to fairly distribute utility costs among tenants. One is a ratio utility billing system. Another of the most common methods is through the use of a utility submetering system. However, submetering can be expensive to implement.
First, there is the cost required to install the appropriate equipment. It may even require reconfiguration of the existing plumbing or electrical systems, which will cost even more money. Implementing a ratio utility billing system is an excellent alternative to the use of a utility submetering system.
A knowledgeable energy management company will be able to advise you regarding the best utility expense distribution solution for your property.
What is a Ratio Utility Billing System?
Often referred to as RUBS, a ratio utility billing system is a structure that allocates utility expenses based on several individual factors. There are many advantages to the use of this kind of system. It is versatile, inexpensive, and exceedingly customizable. Implementing a RUBS creates a situation where everyone wins.
Square Footage
Square footage is one of the factors that can be used to determine utility allocation. This is useful for utilities like gas and energy. A larger space will require more gas and energy to effectively regulate temperature. Similarly, a larger space will use more energy for adequate lighting.
Number of Occupants
The total number of occupants is another way to designate the utility allocation. This is particularly effective when used for the water and sewage bills. More people present in the property will result in more water being used. Similarly, more people will likely need more trash disposal services than fewer occupants.
Number of Rooms
Similarly to using square footage, the total number of rooms is a factor that can fairly determine how the energy bill is split. This can also be adjusted depending on the type of rooms the property contains. For example, more bathrooms may translate to more water usage. More rooms will likely mean that more gas is being used to heat the property.
Number of Fixtures
The number of fixtures is another common way to regulate how utility costs are distributed. The more fixtures a building possesses, the more energy they are likely using. For example, a building that contains multiple refrigerators will necessarily be using more energy to keep the systems running.
Benefits of Using a Ratio Utility Billing System
There are many benefits to the use of a ratio utility billing system. Similarly to how splitting dinner costs may be unfair, evenly splitting utilities may not be the best option. Someone who only ate a salad may feel slighted at having to pay the same amount as the individual who had a steak and 5 glasses of wine. This same concept can apply to utility cost distribution.
A small office probably uses significantly less water than a larger business and may become unhappy when asked to pay the same amount for water that the large business pays. The great part about using a RUBS is that it allows you to distribute utility expenses fairly, depending on the situation.
A RUBS is completely customizable and can be adjusted to match the customer’s needs. You can use multiple factors to determine the way a single utility is distributed. For example, you may want to use both the number of occupants and the square footage of the property to determine how the energy bill will be allocated across tenants. This may be useful because the same sized unit will require a similar amount of energy to heat, but more people may use more energy with their daily operations than a property with fewer people. You can also use different factors for different utilities. Some factors make more sense to determine separate utilities, such as the water bill correlating with the number of people in the property.
A ratio utility billing system is often more convenient than a utility submetering system. There is no need to install specialized equipment, which can help avoid intruding into each tenant’s space to implement the system. It also prevents the need for an initial capital investment, like paying for the submetering equipment or reconfiguring the plumbing system.
A RUBS is particularly helpful because it helps regulate the utility costs for multi-unit properties. It also limits the overall resource use. As tenants become responsible for utility costs, they will often be more conscientious about their utility use. This has been shown to reduce utility use by a significant amount.
Everyone Wins
Implementing a ratio utility billing system is a configuration where everyone wins. Giving tenants responsibility for their utility costs allows them to have more control over their operating costs. Rather than covering utilities and rent in an umbrella payment, they will be able to reduce their utility use and ultimately reduce their overall expenses. This helps keeps tenants happier at no cost to landlords.
Landlords also save money by reducing operating expenses. A RUBS eliminates the need for expensive submetering equipment. It also requires less work on the part of the landlord to ensure that utility bills are being paid. In many cases, an energy management company will handle all of those processes for the property owner!
Finally, installing a ratio utility billing system helps the environment! Tenants will be more conscientious about their utility use, which will conserve resources. A RUBS helps tenants, landlords, and the environment, so everyone wins.
The utility billing system you use is extremely important. It can affect your overall costs, as well as the tenants’ utility usage. The best solution for you will depend on your situation, including your budget and desired outcome. Consulting with an energy management company can help you determine the best method for you.
A ratio utility billing system is an excellent method for distributing utility costs. It can create fair utility expense allotment based on a variety of factors. It doesn’t require the initial expenses that are necessary with the use of alternative utility distribution systems. Furthermore, a RUBS will help limit overall utility use and aid in keeping tenants happy. It can be customized to the needs of each property, resulting in the best possible distribution of utility expenses.
