Most apartment communities aren’t seeing the potential savings right in their own backyard. One of the ways apartment housing providers choose to manage their utility costs is through a Ratio Utility Billing System (RUBS). RUBS is a system that allows housing providers to share costs with residents by allocating billing amounts based on unit occupancy, square footage, or a similar metric. By dividing the cost between owner and residents, housing providers can increase their net operating income and encourage saving resources.
Many housing providers know that RUBS can be used with utilities such as water, sewage, electricity, gas and trash to recover costs and increase net operating income. It is commonly understood that trash utility costs include the trash hauler fees, often provided by the local municipality. But many professional property management teams are aware there is much more to managing trash than simply hauling it away. Trash management includes the extras that keep your community looking (and smelling) its absolute best:
*Large item removals
* Cleaning and tidying of trash and recycling areas
* Doorstep valet pick-up
* Pressure washing of trash and recycling areas
* Odor and fly control
The little-known secret of RUBS savings is that these trash management services are also considered utilities and can therefore be shared with residents as utility costs. By incorporating other trash management costs, such as tidying, bulky item removal, valet pick-up, and more in RUBS, housing providers can minimize their utility costs as operating expenses for their multifamily properties even further. In other words, there is money to be found in the trash.
Strategic Sanitation Services, Inc. is a premium trash management provider to Southern California apartment communities whose service fees can be distributed using a RUBS model. Strategic’s president Kenneth Reyes commented, “The combination of Strategic’s trash management solution and a Livable’s bill-back service creates an opportunity for housing providers to improve the curb appeal of their communities and their operating profits at the same time.” RUBS with trash management has the potential for significant savings.
As an experiment in the relationship between RUBS and net operating savings, Strategic partnered with Multifamily Utility Service Providers (MUMSPs) and management companies to conduct an analysis of the annual Profit and Loss statements for a random Southern California multifamily portfolio.
The results revealed an average annual utility cost of $1,054 per unit. However, Strategic found that only 44% of this cost was being recovered through RUBS. Livable estimates that most communities can recover 90% of utility costs using RUBS. For this portfolio, a 90% recovery rate would mean recovering additional $491 per unit using a RUBS strategy. Combining the per unit utility cost with a 90% recovery rate at a community of 150 units results in a potential net operating increase of $73,650 annually. This analysis presents a significant revenue opportunity for housing providers, suggesting that tens of thousands of dollars can be saved simply by using RUBS to its full potential while also boosting rental prices and desirability of the community.
In short, by utilizing RUBS to share the costs of comprehensive trash management and other utilities with residents, housing providers have an opportunity to significantly increase their savings and help curb excess utility usage. What most management companies don’t know? These savings just might be found in the trash.
What are you waiting for? Sign up with Livable today and start recovering rising utility costs including water, trash and sewer. Want to find out how much you can save? Book a call with a member of our team before signing up!
This blog is partner content provided by the team at Strategic Sanitation Services.
