Don’t Let RUBS Rub You the Wrong Way: Improve Utility Cost Recovery Without Submetering

Charging your residents for their utility consumption fairly isn’t just an ethical dilemma – it’s an economic one. Residents who pay for their consumption are more likely to reduce it, saving both property management and residents money. While submeters are a great solution, they’re not the only one. If your property isn’t equipped with submeters, you might be wondering how to fairly charge your residents for utilities. RUBS is an option that uses a predetermined formula to bill residents for their fair share of utilities.

What is RUBS?

RUBS stands for Ratio Utility Billing System. It leverages a property’s actual expenses to allocate charges to residents, primarily covering utilities like water, sewer, and trash. In some cases, RUBS is also used to bill natural gas and electricity, particularly when residents haven’t directly set up these services with utility providers. The allocation process considers factors such as apartment occupancy, square footage, and the number of bedrooms or bathrooms.

What are the advantages of RUBS?

Although submetering remains the gold standard for utility billing on multifamily properties, RUBS is still a great option for fair billing. RUBS benefits include:

• Fair cost allocation: residents are confident that they are only paying for their usage.
• Reduced operating costs: property owners can maximize recovery on utility costs and reduce absorption of costs when there is an increase in utility expenses.
• Conserved utilities: properties that utilize RUBS see a 6-39% decrease in water usage.
• No cost installation: the only thing you need to utilize RUBS is the correct lease language. Once that’s in place, using RUBS is nearly instantaneous.

How do I calculate RUBS charges? 

While the formula can seem confusing and overwhelming, it is actually pretty simple. You can use the following factors to determine what formula is right for your properties:

• Number of occupants: more people = more utility usage. This can be as straightforward as 1, 2, 3 or a factored occupant formula can be used.
  • Factored occupants: Each additional occupant after the first is assigned a multiplier. The idea being that two people does not equal double usage as there will be shared usage (dishwashing, laundry, etc.).
•  Square footage: bigger units will cost more to heat and cool. Factoring in square footage is a great way to make sure gas and electricity are billed differently.
• Combination (50/50): mesh the both of both worlds to ensure that your residents are paying their share.
• Other: have a washing machine, fireplace, gas range, or other amenity that affects consumption? Consider putting this into your formula for RUBS!

How can I implement RUBS today?

Implementing RUBS is super simple when you use The Utility Experts™. Let us help you develop the right formula for your properties, navigate local laws with our legal team, reduce operating costs, and conserve utilities. For more information on how RUBS can increase your NOI, contact us. We look forward to hearing from you!

Is RUBS not right for you? That’s okay! Let us help you decide on a better billing method. Download our free eBook, “Bill-Back Better: A Condensed Guide to Resident Billing Methods”,  today.