Most property managers are laser-focused on occupancy, rent growth, and expense control.
But there is one category quietly draining NOI year after year: utilities.
Not because rates are high. Not because residents are using too much water.
Because the billing strategy is either missing, manual, or mismanaged.
If you manage multifamily properties, here are five common ways revenue slips through the cracks and what those missed dollars can actually cost you over five years.
👉 Download the full 2026 Utility Outlook to see how your markets are trending
This is the biggest missed opportunity in multifamily.
Many properties still include water, sewer, trash, or gas in rent. It feels easier. Fewer line items. Fewer resident questions.
But simplicity comes at a price.
Let’s look at a conservative example:
That’s:
Nearly half a million dollars absorbed as an operating expense.
Now consider property value. At a 6 percent cap rate, $90,000 in annual NOI equals:
$1.5 million in asset value.
Utility billing is not administrative work. It is an NOI lever.
And yet many properties leave it untouched because it feels complicated or risky.
Some properties attempt cost recovery, but the structure leaves money behind.
Common issues:
Even a $20 per unit monthly shortfall at 100 units equals:
That is real money quietly leaking from your operating margin.
A properly structured RUBS model or billing system ensures costs are allocated fairly and consistently, without creating unnecessary friction.
Spreadsheets. Manual uploads. Double entry. Late statements.
It feels manageable, until it isn’t.
Manual utility billing often leads to:
Each error creates administrative cost and, often, revenue loss. Charges get waived. Adjustments get made. Collections get harder.
And your team spends hours fixing issues instead of focusing on leasing, renewals, and resident experience.
Over five years, the cost of time alone is substantial.
If one team member spends just 8 hours per month on billing tasks at $25 per hour:
That does not include lost recovery from mistakes.
Modern billing platforms eliminate these gaps. You can automate allocations, review statements before they go out, and reduce the back-and-forth that drains your team’s energy.
When residents do not see what they use, behavior does not change. Bundled utilities often lead to higher consumption because there is no connection between usage and cost.
But when residents receive itemized statements or even educational statements that show what they would have owed, something shifts. Usage becomes visible. Waste decreases. Fairness improves.
This is not about penalizing residents. It is about transparency.
And transparency supports both:
Lower overall property utility costs
A stronger sustainability story for modern renters
Even small reductions in property-wide consumption can materially impact annual expenses.
Visibility drives accountability. Accountability protects NOI.
Many independent owners and mid-sized portfolios believe:
So they do nothing.
Meanwhile, costs rise every year.
The truth is, utility billing solutions today are more flexible than ever. Portfolios of any size can implement cost recovery. Some owners prefer a supported approach. Others want full control with a DIY platform.
The important thing is not how you implement.
It is whether you start.
Let’s combine conservative numbers for a 100-unit property:
Five-year impact:
Total: $582,000 over five years.
At a 6 percent cap rate, that could represent nearly:
$1.7 million in property value.
This is why utility billing is not a back-office detail.
It directly affects long-term asset performance.
You do not need to overhaul everything tomorrow.
Start here.
Pull 12 months of:
Calculate:
This gives you a clear baseline.
Confirm what is currently billable and how utilities are structured.
If changes are needed, plan to implement them at renewal cycles rather than mid-lease.
Keep communication clear and resident-focused.
Ask:
Even partial recovery can significantly shift margins.
Options may include:
The right approach balances fairness, simplicity, and operational ease.
Look for a platform that allows you to:
The goal is not more work.
It is less manual effort and more predictable recovery.
You work hard to optimize rent, reduce vacancies, and control maintenance costs.
Utilities deserve the same attention.
When structured correctly, utility billing:
You are not just recovering costs.
You are strengthening the financial foundation of your property.
If you suspect you might be leaving money on the table, you probably are.
The good news? It is fixable.
See how utility billing can boost NOI. What to see how simple it can be?