Implementing RUBS/Submetering in Apartment Complexes

[Joshua Harmon]

Obviously, the goal of owning buy and hold real estate is to maximize cashflow and NOI. I have a 41 Unit Apartment Complex that I'm analyzing that has great potential but it has one issue, the WATER BILL. The water bill runs about $2,000 monthly and $24,000 annually. That equates to 13% of our monthly cashflow being eaten up by just water.

My market of Fort Smith, Arkansas (also known as the River Valley) is pretty consistent with owner's being responsible for paying water. It seems to be the biggest burden for Apartment owners in my market, and the city is continuing to raise the water bills every few years.

My question to you guys is, should I explore RUBS/submetering although everyone in my market is getting destroyed by their monthly water bills? Who in the BP community has implemented this strategy? What was your experience?

[Salvatore Lentini]

@Joshua Harmon and when you implement RUBS for water you'll save on your sewer bill since tenants (studies show) will be more conservative with their water usage once they are paying for it.  Sewer bill is usually based on water usage.  So you'll get a 2 for 1 savings.