RUBS Utility Billing vs. Submetering: A Decision Guide

TL;DR: Not every property gets to choose between RUBS and submetering – your building, budget, and state regulations all play a role. RUBS (Ratio Utility Billing System) is faster and less expensive to implement. Submetering is more accurate but requires upfront investment and isn’t feasible everywhere.

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Every month, utility bills hit your property, and the math is the same: costs go up, margins get tighter, and residents expect more transparency than ever. How you recover those costs and reduce complaints depends on your utility billing method.

Two of the most common property and apartment utility billing methods are RUBS utility billing and submetering. But which one saves you the most money, and which is allowed in your city and state?

In this guide, we’ll break down how each method works, where each one falls short, and what determines which is the right fit for your properties.

What Is RUBS?

A ratio utility billing system (RUBS) is a cost-recovery method that divides a property’s master utility bill among residents using a predetermined formula rather than individual meters.

Instead of measuring how much water, gas, or trash service each unit consumes, RUBS works backward: the utility bills the property as a whole, the landlord collects these charges, and then recovers a proportional share from each resident through their monthly fees. The formulas used to distribute the bill can vary in complexity, and you typically have three standard methods to choose from:

• Occupancy-Based: Split costs by how many people occupy each unit or lot.
• Square Footage-Based: Divide costs in proportion to unit or home size.
• Combined (Hybrid): Some operators blend both factors into a single ratio. You set the ratio (say, 50/50 or 60/40) and disclose the method in the lease.

For example, let’s say you own a 60-unit apartment community with a $3,000 monthly water bill and 95 total residents across occupied units. Using the occupancy-based RUBS, here’s how your allocation breaks down.

If you operate a manufactured housing community, the same logic applies – swap units for lots.

What Is Submetering? 

Submetering is a system where each unit or lot has its own meter to track individual utility consumption. Unlike a master meter setup, where one meter measures usage for the entire property, submetering gives you and your residents a precise picture of exactly how much water, gas, or electricity each unit uses.

Here’s how billing for submetering works:

• The utility bills you for the property’s total consumption
• You reach each unit’s submeter and bill residents individually
• Residents pay for what they actually use – nothing more

Say a 60-unit community uses 300,000 gallons of water in a month at a rate of $0.01 per gallon – a $3,000 total bill. With submetering, this bill gets divided by actual usage. Here’s how this allocation breaks down.

Unit C pays more because Unit C used more – simple as that.

Pros and Cons of Submetering vs. RUBS Utility Billing 

Both RUBS utility billing and submetering aim to recover utility costs from residents, but the right choice depends on what’s in your control. For some property owners, the choice has already been made by their building’s infrastructure, the state’s regulations, or their budget. Here’s what each utility billing method gets right and where each one falls short.

RUBS Pros and Cons

A ratio utility billing system (RUBS) is often the default, but not always by choice. When your building can’t support submeters, your budget doesn’t allow for installation, or your state restricts submetering, RUBS is what’s left available to you.

Pros of RUBS

• No equipment or installation required – low cost to get started
• Fast to set up across single or multiple properties
• Works across water, gas, trash, and more
• Viable option for older multifamily buildings and manufactured housing communities

Cons of RUBS

• Billing is estimated, not based on actual usage
• Residents have no visibility into their own consumption
• Less incentive for residents to conserve
• No usage data to help you identify leaks, inefficiencies, or maintenance issues

Submetering Pros and Cons

Submetering delivers a level of accuracy and insight RUBS can’t match, but only when submetering is an option for your property. Submetering installations are an upfront investment, and not every building is a fit.

Pros of Submetering 

• Residents are charged for exactly what they use
• Accurate billing lowers your overall utility costs
• Spot leaks and catch maintenance issues early
• Demonstrates a higher standard of property management

Cons of Submetering 

• Higher upfront cost on equipment, installation, and setup
• Older multifamily buildings may not be compatible with submeter installation
• State and local regulations vary widely based on what’s permitted
• More administrative overhead costs

At a Glance 

Every property is different, but the tradeoffs between RUBS and submetering are consistent. Here’s how the two utility billing methods stack up.

State Regulations for RUBS vs. Submetering 

Before you decide between RUBS and submetering, check your state and local regulations. Utility billing rules vary from state to state, sometimes even city to city. Here are some of the most important state-specific regulations to know about RUBS utility billing and submetering:

• Connecticut: RUBS are banned entirely for residential multifamily properties. Submetering or absorbing utility costs are your only options.
• California: RUBS are tightly regulated with strict disclosure requirements on over-recovery.
• Colorado: Existing properties may continue to use RUBS, but new multifamily constructions built after July 1, 2027, must be constructed with metered utility systems.
• Texas: RUBS is permitted, but lease disclosure is required, including the exact formula used and any administrative fees.
• Seattle: A formal push to ban RUBS entirely is underway as of early 2026.

Note: This is a general overview, not legal advice. Consult with a local attorney familiar with your market before changing your utility billing method.  

When RUBS Utility Billing Is the Right Choice

RUBS utility billing is the practical choice as your billing method if:

• Your building is older. Retrofitting individual meters into aging infrastructure is expensive and not always structurally possible.
• Your state or city restricts submetering. In some markets, submetering isn’t allowed or is subject to compliance requirements that make it impractical.
• You need cost recovery in place quickly. RUBS can be set up in days. It’s the fastest way to stop absorbing utility costs.
• You operate a manufactured housing community. Master-metered lots often make individual metering impractical.
• The ROI on submetering doesn’t pencil out. For smaller portfolios or lower utility costs, the upfront investment may take years to recoup.

When Submetering Is the Right Choice

When your property can support submetering, the long-term return is hard to ignore. Consider submetering if:

• You’re building new or planning a major renovation. Installation costs drop significantly when submeters go in during construction or a gut renovation.
• Your utility bills are eating into your NOI. Usage-based billing drives resident conservation, lowering overall bills over time.
• Billing disputes are a recurring problem. Submetering gives every resident a verifiable number, which reduces complaints and turnover.
• You want better visibility into your property. Usage data helps you catch leaks early and make smarter maintenance decisions.
• Your state requires it. In some markets, submetering is no longer optional for new construction or buildings above a certain size.

Quick Decision Framework

Not sure where you stand on RUBS utility billing and submetering? Answer these questions in order, and the first “yes” will tell you where to start.

• Is submetering prohibited or heavily restricted in your state or city?
• Is your building older or structurally unable to support submeter installation?
• Do you have the capital for upfront installation costs?
• Are your monthly utility costs high enough that usage-based recovery would improve your NOI?

The Right Billing Starts With the Right Partner

Whether RUBS utility billing is your only option or submetering is the right long-term investment, what matters is that you’re recovering costs in a way that works for you.

Conservice’s meter management and utility analysis services can help you figure out exactly where you stand. Contact us today to learn more.

Submetering vs. RUBS FAQ

Q. What is the difference between RUBS utility billing and submetering?

A. RUBS divides your master utility bill among residents using a formula. Submetering measures each unit’s actual consumption. RUBS is easier to implement – submetering is more accurate.

Q. Is RUBS utility billing legal in all states?

A. No. A ratio utility billing system is banned in some states and tightly regulated in others. Always check what’s permitted in your market before changing your billing method.

Q. Which method is better for reducing utility costs in the long term?

A. Submetering is better for reducing utility costs in the long term, since residents pay for exactly what they use.

Q. Can I switch from RUBS to submetering later?

A. Yes. The best time to switch from RUBS to submetering is during a renovation or new construction, when installation costs are significantly lower.

Q. What should I look for in a utility billing provider?

A. Look for a utility billing provider with experience in your property type, current knowledge of state regulations, and accurate, transparent reporting.