With industry best practices and new ways (through data) to maximize recovery, property owners can pay less and use less for what residents and operations need. Digging into information and analytics will uncover hidden yield and actions you can take immediately to enable a more sustainable, personalized multifamily living and managing experience. In 2020 alone, RealPage identified $58 million in improvements to customers’ properties’ net operating income (NOI) solely through utility management. More efficient multifamily utility management is key to increasing resident comfort and property NOI.
What’s the path to sustainability?
The 2020s is the era of sustainability. Through data, property owners can get clues to where there are more areas to be sustainable. The first step is to examine the utility bill, which can provide a wealth of valuable information. Next is sorting out insights and reporting numbers to better understand actual utility usage across the property. Then, property owners can figure out what the options are to select utility services that fit their residents’ and property’s needs and operations. Sometimes, utility providers change charges, and weeding through any differences helps identify what plan fits best. Finally, with greater clarity into property utilities and utility management services, property owners and residents can start seeing the savings and recovered money!
The rise of submetering
Utility submetering became a more widespread practice starting in the 1970s, and began another increase in use nationally in the 1990s. Now, in some parts of the country, new properties cannot establish a water service connection without a submeter installation. A submeter is equipment that is a part of the property and property owners own, much like a hot water heater or garbage disposal. Not fixing this can have negative impacts, such as that estimating billing is inaccurate, or even illegal in some areas. Estimating consumption generally doesn’t allow properties to recover as much as they can.
Another practice that relies on imprecise information is flat fee billing. This is easy to set up, but typically can lead to a property underrecovering or overrecovering utilities expenses. Both can cause problems, but overrecovering can be a regulatory concern. While electricity and gas are usually directly metered to residents, water and sewage generally are not. This can contribute to residents not having as much of an understanding or comparison for conservation.
What can benchmarking do for properties?
Benchmarking can seem unnecessary. Why would a property owner need to know other properties’ metrics on top of their own? A comparison with like properties allows property owners to better understand their own information. Benchmarking with Energy Star brings an abundance of useful data, and the act of benchmarking alone reduces consumption. It can be difficult for a site team to wade through the data when they want to focus on customer service and leasing, so the RealPage Sustainability Suite dashboard offers the most important information, at a glance, so there are no surprises.
Sustainability benchmarking can guide you and your portfolio forward as sustainable development becomes a must as well as resident preference. Have your residents ever asked about sustainability? Multifamily residents are becoming increasingly concerned about climate change and want to do their part as responsible consumers. Residents are more likely to participate in conservation programs than homeowners, so this is a prime opportunity for all stakeholders to benefit from better utility management.
According to the U.S. Environmental Protection Agency (EPA), about 10% of households have leaks that waste 90 gallons or more per day. This is alarming, and property owners and operators have the responsibility of enabling and checking consumption alerts and leak detection alerts to address leaks immediately. As water damage can easily spread to other units or areas of the property, leak sensing technology is crucial for avoiding property damage, costs, and stress.
Energy markets can be volatile, with gas and electric rates doubling or tripling in some areas of the country. However, there has been some evolution in the market with renewable energy. With power purchase agreements, portfolio owners can add renewable energy sources added directly to the property by contracting with the utility provider, then paying for the energy directly at rates typically less than market rate. In some areas of the country, residents can opt to receive energy from renewable resources, which can amount to about 10% of savings. Renewable energy consumption on a property counts in Environmental, Social, and Governance (ESG) reporting. In addition, investigating tax rates can yield refunds, as sometimes utility providers can make mistakes and tax utilities in markets that they shouldn’t. Even property tax bills can have recovery opportunities to bill back residents.
Property owners and managers may typically see trash and recycling as the “back of the house” rather than a common area. However, the trash room or waste bins are a key touchpoint for residents, and are visited about one to five times per week per unit! Pools and fitness centers don’t see this amount of action.
Over the last decade, conservation efforts have been meaningful with paybacks, proving that sustainability has a guaranteed return on investment. Smarter multifamily utility management is essential in this push for sustainability, for everyone.
Want to learn more utility management strategies? Watch this webcast hosted by RealPage’s Amye Baker, Vice President of Customer Success–Enterprise Solutions, and Mary Nitschke, Vice President of Sustainability, to gain a greater understanding of utility management tools and practices.
STRATIS®, a RealPage Company, creates smart apartments and intelligent buildings and is the only platform of its kind built for the complexities of multifamily and student housing. STRATIS is installed worldwide across the U.S., in Japan, the UK, EU, and Latin America. STRATIS now serves hospitality, retail, and small to mid-size commercial, as well. STRATIS is an Inc. Magazine “Fastest Growing Company in America” and a Top Ten Entrepreneur Magazine “Best Company in America.” STRATIS was recently acquired by RealPage to enable STRATIS Smart Building, a more connected lifestyle, and unleash hidden yield through new revenue streams.