With extreme weather events such as the current drought in California, it is more crucial than ever to strengthen conservation practices as a landowner or land manager. Water and energy conservation efforts will protect the community’s way of life and, just as importantly, allow you to increase the net operating income (NOI) of your property. Across the country, landlords are looking for solutions to generate income, as the usual tactics, like raising rents, aren’t always possible.
A great – and obvious – way to increase your NOI is to focus on reducing consumption, thereby reducing expenses. With a utility-centric approach, you can increase your property’s revenue and help the planet. The approach is simple: reduce costs by reducing the use of public services. Here’s how a focus on conservation education can positively impact your expenses, your lifestyle, and the environment.
water is wasted
In a year, the average family spends over $1,000 on water costs. Based on information shared by the US Environmental Protection Agency (EPA), the average American uses 82 gallons of water per day. This means that over a 30 day period, a family of four uses almost 10,000 gallons of water. Leaks are a big part of that; the average family can waste over 700 gallons per month from household leaks alone.
In these times of drought, there are simple practices you can focus on that will have significant impacts:
- Avoid flushing the toilet unnecessarily or throwing waste down the toilet.
- Count on short showers.
- Do not let the water run during household chores.
- Use excess water for tasks such as watering plants.
- Wash dishes by hand.
- Conserve drinking water.
- Reduce laundry loads by fully loading washing machines.
- Do not leave sprinklers or hoses unattended and running.
Remember, targeting household utilities is always a smart and easy strategy to reduce consumption and utility bills.
Conservation vs Efficiency
Both conservation and efficiency are ways to reduce the consumption of a resource – whether that resource is water, energy or something else. It is tempting to use the words “conservation” and “efficiency” interchangeably. But really, conservation and efficiency refer to two different, yet related things.
Conservation refers to adjusting behaviors and habits to use less water/energy, while efficiency refers to using fewer resources to perform the same function. For example, installing energy-efficient lights is an energy-efficient method, while turning off lights when not needed is an energy-saving method.
Both are equally important efforts, impacting operating income and environmentally responsible lifestyles.
Energy prices are rising
In 2019, the United States Energy Information Administration (EIA) reported that the average monthly electricity bill for residential customers was $115. That year, the average electricity price was 13.01 cents/kWh. Sure, electricity rates vary from place to place, but since 2019, energy rates across America have gone up.
In fact, home energy prices have outpaced inflation, which has already hit a 40-year high in the United States, according to the Guardian. With the rising cost of energy, it doesn’t help that households waste a lot of electricity. Studies have shown that 35% of residential energy use in the United States is wasted energy.
Your tenants are key to your retention strategy
There are many things a homeowner can do to reduce water and electricity consumption on their property. sense of water according to the EPA, labeled products are 20% more water efficient and perform as well (and sometimes better than) than standard models. You could replace your property’s old, inefficient faucets with WaterSense labeled models, but if your tenants keep running the faucet while they brush their teeth and shave, a lot of water is still wasted.
To share storage tips with your tenants so they know what they can do to save water and energy. A study by the Yale Program on Climate Change Communication revealed that Americans are increasingly concerned about global warming and increasingly supportive of climate solutions. Chances are your tenants are interested in conservation and just need to be equipped with the knowledge and tools to get involved!
Go further and share utility data with your tenants. Let them know how much their unit, or even the entire building, is using. This can enable them to make informed decisions about their use of public services. They can track the effectiveness of their unit and get the information they need to refine their personal approach to conservation and be even more conscientious about using public services.
One way to do this is to share utility data in a newsletter that highlights conservation trends on your property. Technology can be a powerful asset to the modern homeowner, especially when it comes to conservation. By using a smart billing company, you can access software that simplifies utility data reporting and also gives tenants tips they can use to reduce their usage.
Invoicing: a better incentive to save
It’s easier to stay on track with conservation goals when you’re responsible for your consumption. Seeing month-to-month utility costs and trends can motivate you, especially if you are financially responsible for the utilities you use.
A study compiled by the National Apartment Association and the National Multi Housing Council showed that residents manage their use of utilities more carefully when they have to pay for their share of water service separately than when these costs are built into the rent. This study found that the implementation of a utility billing system (RUBS) in particular resulted in a reduction of approximately 6-18% in water consumption.
How RUBS is a conservation and cost reduction tool
A utility billing system distributes a property’s utility costs among residents based on selected criteria. This system takes into account many different factors, such as unit occupancy, common area amenities, and square footage, to ensure fair and accurate billing to tenants.
Landlords and tenants can create a conservation community around RUBS. As a landlord, when you use this system, you inform your residents about their share of utilities, keep them informed of trends, and encourage them to save. By making tenants directly financially responsible for their use of utilities, you can offset rising utility costs and increase your bottom line.
There are important guidelines to follow when implementing RUBS. For example, in rent-controlled markets, tenants can only be listed on turnover. A utility billing expert can help you navigate the implementation of RUBS and get the most out of this system.
Livable is a leading residential and commercial real estate utility billing company whose mission is to promote conservation through billing and education. With our suite of cloud services, we can help you reduce your consumption while increasing your bottom line. To learn more, visit our website at liveable.com