RUBS vs. Submetering: Which is the Best Option?

When managing utilities, landlords and property managers have two standard methods: submetering and Ratio Utility Billing System (RUBS). Both approaches aim to allocate utility costs fairly among tenants, but they differ in their implementation and potential advantages.

Let’s explore the concepts of apartment submetering and RUBS, outlining their pros and cons to help landlords and managers make informed decisions.

RUBS (Ratio Utility Billing System)

RUBS is a billing system that calculates and distributes utility costs among tenants based on predetermined ratios or formulas. It does not involve individual meters for each unit. Instead, factors like square footage, number of occupants, or other criteria are used to determine the share of utility expenses for each tenant. The key features of RUBS include:

1. Simplicity and Cost-Effectiveness

Implementing RUBS is relatively more straightforward and less expensive compared to submetering since it does not require installing individual meters. This makes it an attractive option, especially for older buildings that may need to be more easily retrofitted.

2. Streamlined Billing Process

RUBS simplifies the billing process for property owners and management companies. They can allocate utility costs among tenants without needing meter installation or maintenance.

3. Increased Revenue

RUBS can help property owners increase revenue by passing on some utility costs to tenants. It can be particularly beneficial in situations where utility expenses are rising.

Despite its advantages, RUBS has certain limitations that should be considered:

Lack of Accuracy

Since RUBS uses predetermined ratios rather than actual consumption, it may not reflect individual tenants’ precise utility usage. This can lead to discrepancies and potential dissatisfaction among tenants.

Perception of Inequity

Some tenants may perceive RUBS as an unfair allocation method, especially if the predetermined ratios do not accurately reflect their actual consumption patterns. This can lead to disputes or complaints among residents.

Submetering

Submetering involves the installation of individual meters for each unit, enabling the measurement of actual utility consumption for each tenant. Key features of submetering include

1. Accurate Billing

Submetering provides precise measurements of utility consumption for each tenant, ensuring fair and accurate billing. This transparency can contribute to a more satisfied tenant base.

2. Conservation and Accountability

With submetering, tenants become aware of their individual utility consumption. This often leads to more responsible usage and conservation efforts, as they directly bear the cost of their consumption. Submetering promotes a sense of accountability among residents.

3. Identification of Waste and Inefficiencies

Submetering can help identify areas of utility waste or inefficiencies in the building. By analyzing individual consumption patterns, property owners can make targeted improvements to reduce overall utility costs.

However, submetering also has certain drawbacks to consider:

Upfront Costs

Installing individual meters can require a significant upfront investment, especially in existing buildings where retrofitting may be necessary. Property owners should carefully evaluate the financial feasibility of submetering.

Maintenance and Calibration

Submetering systems require ongoing maintenance and calibration to ensure accurate readings. Property owners should be prepared for associated costs and disruptions during maintenance activities.

Here’s a table summarizing the differences between submetering and RUBS:

This table provides a concise overview of the pros and cons associated with submetering and RUBS. The specific advantages and disadvantages may vary depending on the unique circumstances of each property and tenant population.

Which one to choose? 

When deciding between submetering and RUBS, landlords and managers should consider the following factors:

1. Property Infrastructure

Assess the feasibility and cost of installing individual utility meters for submetering. Older buildings or specific locations may present challenges for meter installation, making RUBS a more suitable option.

2. Tenant Mix and Preferences

Understand the preferences and needs of your tenant demographic. Some tenants may value accurate billing provided by submetering, while others may prioritize the convenience and simplicity offered by RUBS. Conducting surveys or seeking tenant feedback can help inform your decision.

3. Legal and Regulatory Considerations

Research and comply with local laws and regulations related to utility billing methods. Some jurisdictions may have specific requirements or restrictions regarding submetering or RUBS. Ensure that your chosen method aligns with these guidelines.

4. Administrative Effort

Evaluate the administrative workload associated with each method. Submetering requires individual meter readings and billing for each unit, while RUBS involves calculating and allocating utility costs based on predetermined ratios. Consider the resources and time available for effective management.

5. Conservation Incentives

Determine the importance of promoting conservation among your tenants. Submetering provides a direct financial incentive for individuals to monitor and reduce their utility usage, whereas RUBS may offer a different level of accountability.

6. Cost Recovery

Evaluate the financial implications of each method. Submetering allows for direct cost recovery from tenants, which can offset utility expenses. RUBS may distribute costs among tenants but might not cover the full utility expenditure.

By considering these factors, landlords and managers can make an informed decision based on the specific circumstances of their property, tenant preferences, and legal requirements. It may also be beneficial to consult with industry professionals or utility companies to gather additional insights.

Streamlining Utility Billing With Beachfront Property Management 

We at BFPM take a proactive approach to utility billing, implementing strategies to streamline the process and ensure accuracy and efficiency. Through the installation of submeters, diligent meter reading and monitoring, and the use of effective billing and invoicing systems, Beachfront Property Management accurately tracks and allocates utility costs to tenants. With a focus on compliance, the property management team stays updated with local regulations, maintains transparent communication channels for dispute resolution, and promotes conservation measures among tenants. By taking these measures, Beachfront Property Management ensures that utility billing is a seamless and fair process, contributing to tenant satisfaction and overall operational efficiency.