Master Metering Versus Utility Submetering
If you live in the United States, you are aware of how much you pay for your utilities. A meter records your usage. A company then manually, or automatically, receives this information and prepares a bill based on the figures. The bill will then be sent to either the owner or the registered tenant. It will depend upon what type of metering is involved – master or utility submetering.
Master Meters
In America, one of the most common types of metering systems is master metering. The largest percentage of multi-tenant commercial and multi-unit residential properties has a “master meter.” As the name indicates, a master meter is a unit that is in control of the utilities of the complex. It is the only meter. In this singular role, the master meter records the utility usage for the entire structure.
The recorded usage indicates the entire amount of water or other utilities a building, residential, or commercial uses. As a result, the managing company sends the bill to the property owner. Tenants do not see the bill. They also do not pay for their usage directly. Instead, the owner may include the utilities as part of their rental contract. Alternatively, the bill may be subdivided among the tenants and they charge according to a specific formula.
The result is a system that does not let tenants see or even pay for the energy or water they actually use. It provides them with no mechanism to change their monthly utility bills. It also does not give building owners the means to accurately address water usage nor use utility reduction costs to boost their net operating income (NOI).
Utility Submetering
The alternative to a master meter is installing a submeter. Utility submetering is one way we at ABT Water Management can help owners and tenants pay the real cost of their utility usage. Submetering requires the installation of individual meters for each unit. While the initial outlay may seem expensive, in the end, owners and tenants do benefit.
The owner does not have to pay for utility usage. If he or she contracts the management – including repair work, maintenance and billing, to a management company such as us, a fee is required. However, the owner will still see a rise in his/her NOI. Moreover, the owner reduces personal stress and avoids costly errors by no longer having to guestimate the rising cost of utilities when charging rent.
Meanwhile, tenants can rely on a more consistent rent. They can also decrease their overall monthly bills by reducing their water usage. Sub metering allows them to be in charge. They can now waste or conserve water on their own terms. In other words, both tenants and owners can benefit when they allow ABT Water Management to install an accurate, responsive and efficient utility submetering system.