The Three Main Difficulties of Submetering Tenants’ Water Consumption for Landlords and Property Managers: Water Conservation Still an Expensive Proposition (LeakBird)

Feb.28, 2009 in Water Conservation

There’s an excellent old article from 1997!?! on “submetering water” from the Journal of Property Management that’s surprisingly contemporary in its report, indicating how little has changed with regard to the promising yet cost-prohibitive installation of water meters per individual residential unit.

As I see it, the difficulties of water submetering in property management can be broken down into three chief points:

Cost-Prohibitive
Difficult to Install
Legally Thorny

Landlords and property managers, more than ever before, are concerned with water conservation in their tenants’ abodes.

However, at $400 to $500 a pop (and this doesn’t include other associated fees or cost of installation), requiring a skilled technician to retrofit often already tenuous plumbing with a variety of water conservation submetering (sometimes spelt “sub metering”) technologies, from ultrasonic to paddlewheel, until water gets three or four times as expensive or public works subsidies of 50% or more become legion, there’s still little economic incentive to outfit one’s buildings with a submetering system.

The fact still remains that in order to reduce your tenants’ consumption to a trickle via individual unit metering, your upfront costs are sky-high.

It’s hoped that the burden of water use will be switched to the tenant with submetering, though depending on your municipality’s city codes, this can vary. I think that the most important twin benefit of submetering is that when there is a leak, say a running toilet, it’s pinpointed, and depending on how often you monitor your system, you’ll know within a day or maybe a few days, as opposed to when that monthly or often bi-monthly water bill is delivered.

Water conservation works when your pocketbook or cash flows are on the line. But it also works if you’re disturbed or alarmed, as when a smoke detector goes off or the fire security system is going off in your building. You react quickly. So perhaps there’s a way that landlords or property managers can build this kind of psychological response system into their submetering. Of course, this would add another expense on top of an already cost-prohibitive industry.

The submetering article under discussion is divided into six sections –

Using Less Water: If you can get your tenants to pay for their water, studies show that water usage declines 25% to 40%. But wouldn’t it be more beneficial to you if it was your gain as a landlord or property manager, and the cost of the submetering was built into your tenants’ rents? The reason I say this, and it’s probably somewhat obvious, is that otherwise the 25% to 40% is your tenants’ gain, your water company’s gain, the environment’s gain. And these are of course excellent gains as well!!!
How Submetering Works: Usually a submetering company takes over the billing of tenants, as well as installation and checking regularly on the meters, which adds other costs. Submetering systems can be read on site or remotely.
Getting Tenants to Buy In to the System: Of course, if it’s a new development, there’s no need to worry about tenant buy-in, because submetering is already built into the system. But when it comes to existing properties, one tact is that submetering gets written into the renewal contract. Of couse, in a market like San Francisco, where tenants never leave inexpensive buildings because of rent control, submetering is utterly problematic. As in all business, the work needs to warrant the return!
Finding a Submetering Company: This article says submetering is “The Wave of The Future”. This makes me smile, because this article is 12 years old! How ahead of its time they truly were, yet perhaps they jumped the gun a little as well. However, it’s an extremely competitive market where water is expensive, as a city like Seattle has over a dozen submetering companies!
Tips for Keeping Tenants Happy…hmmm?: This is extremely difficult, given that in order to stay competitive in the market, you need your rent and other associated fees to be, well, competitive…relative to your market position. How to do this when you’ve got an expensive submetering system installed whose costs you’re attempting to recover over a certain time period? Of course, everything depends on your market: tenant law, water rates, public works subsidies.
The Legal Ramifcations of Submetering: Naturally, #5 leads into the legal aspect of submetering. Some municipalities require permit fees or inspection when you install a water submetering system in your building. This adds yet another cost on top of your already exorbitant bill. You don’t want any surprises when it comes to this, as you’re trying to get away from surprise high water bills, and don’t merely want to exchange one surprise for another more expensive surprise with merely a different ribbon, bow and form of wakeup call.

I hope that upon reading this article, you don’t think I’m against submetering. By no means I am not, I just know from my research and the experience of my colleagues that for the time being, in most property management markets across the US, submetering still remains a variety of factors (and I’ll repeat myself here):

Cost-Prohibitive
Difficult to Install
Legally Thorny

Perhaps “The Wave of the Future” still remains just that, even after 12 years.

If you are interested in How You Can Increase Your Cash Flows by $2,500.00 Every Year and Never Pay for High Water Bills Due to Your Tenants’ Running Toilets, sign up for our Free Report here.

Abendigo Reebs is the VP of Business Development for LeakBird Industries LLC in San Francisco, CA. He may be reached by email at ben@leakbird

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