5 Tips to Saving Big Money Managing Apartment Utilities

Apartment Utilities Savings


Saving on Apartment Utilities

More and more, all eyes are on energy and water usage. Investors, property owners and even residents pay close attention to utility bills. In some areas, local and state regulators require that energy performance be reported to the Environmental Protection Agency.

The impact of utilities may seem to affect either the property or resident, but it actually touches both. Certainly, the effect of utilities on an apartment’s operating costs varies depending on whether the community is master-metered or individual-metered. In the National Apartment Association’s 2015 Income & Expense Survey, only 3 percent of a property’s total expenses are from utilities if the property is individual-metered, compared to 8.1 percent – third-highest – for master-metered.

Regardless of who’s writing the check to the power company or water provider, consumption and spend – if not controlled – could potentially affect occupancy. Even in a sub-metered environment where the resident pays for some or all utilities, high energy or water bills can be a big negative.

Apartment Utilities

Efforts to Improve Energy Efficiency

For example, Danny Ward, Vice President of Market Development for RealPage, Inc., points to ongoing efforts by the rental housing industry to improve energy efficiency even if residents are footing the bill. To stay competitive, apartments are helping residents keep their living expenses in check by providing an energy efficient home.

“It’s the wallet-share concept,” he said. “Residents are going to say they only have so much money for living. If rent’s fine but utilities are high, they’ll relocate to a more energy efficient property.”

Whether affordable or conventional, good energy management stewardship can pay in the long run.  Using an energy reporting platform can provide property owners portfolio-wide visibility into energy and water expenses, which allows more effective management and an understanding of what drives expenses.

Apartment Utilities

Ward says properties can take control of energy spending, consumption and management to increase property NOI with these tips:

1. Identify how and where a property uses energy and water

Identify how and where your property uses energy and water, benchmark to determine trends that could help identify waste and excess expenses. Create a baseline for current use, costs and rates by reviewing at least 12 months of utility bills. If you’re having difficulty pinning down a reliable baseline, look for an energy management provider who has the ability to help weather normalize.

2. Identify and understand utility rate structures

Rates are important to monitor, especially if you think you’re not being billed correctly, says Ward.  The lowest rate may not be the best deal, either. But you can’t fully identify and understand charges unless you analyze usage data. Thus, it’s important to be able to assemble data from utility bills and keep an ongoing history so that comparisons can be made, from unit to unit to property to property in the portfolio.  Furthermore, if owners have properties in deregulated markets, establishing a system to validate billed usage to the contracted rate is a must.

“You can’t tell about rate until you get to the data,” Ward says. “You might be on a wrong rate. It happens. But you still don’t know that until you get the data to determine if it’s an issue with an incorrect rate or consumption. It’s there you can see how big an opportunity to save really is. That’s what energy management is about.”

Apartment Utilities

3. Review local rebates and reduce capital expenditures while upgrading

A lot of local and states have money set aside for energy improvements, and suppliers can help properties find the best deals and virtually get upgrades paid for in full. Utility companies and municipalities in many states offer rebates, incentives and demand-response programs to the tune of billions each year to encourage federal facilities and consumers to cut energy use and demand.

4. Work with a reliable partner to identify energy usages and options

Team with an energy management partner to further analyze energy use and determine where opportunity lies to reduce spends. A reliable energy management partner has the ability to fully analyze your energy use. Look for a utility management provider who does rate monitoring, meter level trending, benchmarking, dependable cost avoidance, and weather normalizing.

5. Implement practices for measuring, verifying and avoiding costs

Measurement and verification, and cost avoidance practices are crucial to the success of an energy management plan. Team with a capable partner to help your business meet all protocols. A well-planned and analyzed plan provides property management companies the opportunity to increase NOI.  If you’re going to invest money, you need to measure and verify the effectiveness of the project.

Property managers and owners can save significant money in expenses through effective energy management. Partnering with one or more qualified and proven energy management partners will help apartments keep utility expenses in line and create more efficient communities for their residents.


Contributing Editor, Property Management Insider
President, Ballpark Impressions, LLC

author photo two

Tim Blackwell is a long-time publishing and printing executive in the Dallas/Fort Worth area who writes about the multifamily housing and transportation industries. He has contributed numerous articles to Property Management Insider, and worked as a newspaper reporter in the D/FW area. Blackwell is president of Ballpark Impressions, and publishes the Cowcatcher Magazine. He is a member of the Fort Worth Chapter/Society of Professional Journalists.

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