Is RUBS worth a good idea? Central California Apartment

[Gustavo Gonzalez]

Wondering if anyone has any input on implementing RUBS for their property.  I'm soon to close escrow on a 45 unit building in Central California (Bakersfield) and of course I'm looking to reduce expenses so I'm considering RUBS.  Any feedback/advice much appreciated.

Gustavo

[Chris Roberts]

Originally posted by @E. C. "Stony" Stonebraker:

@Gustavo Gonzalez.  I can't speak for the Bakersfield market you are in, but if comps are charging back, you should, too.  It is a no-brainer way to improve the value of the property.  You can implement it with renewals or new tenants.  Depending on what percentage your comps are charging back, you can gradually charge back over time.  Be sure to check on the limitations on rent vs other income increases on multifamily owners in CA.  

What year was the property built? 

In CA, properties built after 1/1/18 require sub meters to bill back water and sewer to tenants. 

Electricity can not be billed back via RUBs in CA, but you “could/should” be able to go after tenant reimbursement for water, sewer, and trash. As someone stated, my personal recommendation would be to include a common area reduction so residents aren’t hit with the full irrigation expenses in such a dry climate.