Hi @Tom Henderson, first off, what are you trying to charge back to the residents? Water, gas, electricity???
First thing you need to do is ask a RE Attorney in that area if RUBS is allowed and to what extent. Some municipalities don't allow you to do a RUBS and some won't let you collect the full amount. Why? I have no idea.
Second, if you can do a RUBS, the best thing is to have each unit individually metered so you can charge the residents for their exact usage.
Third, if you can't install individual meters, the next best thing is to charge them based on their unit's square footage divided by the total SF of the complex. This will give you a percentage that you setup in a spreadsheet so that all you have to do month in and month out is enter that month's utility bill amount and it will automatically calculate each residents monthly fee. Once you do that, you won't need an outside third party to send an invoice unless it's required by the government for some reason. If you wanted to get a little more creative, you could try adding a surcharge for the number of adults and kids in a unit. The reason for this is because some people might rent a 2 BR unit with only one or two occupants. Another might be 2 adults and a couple of kids. Even though the unit is the same SF, the one with more people will generally use more gas, electricity and water. Of course, if you can individually meter, you bypass this entire paragraph.
Each month, after you run the numbers, give each resident their individual statement along with a copy of the utility bill. Ask them to pay the amount by a certain date. Totally up to you. You can give them a few days or ask them to include the amount with their rent payment at the beginning of the following month.
Last thing. Keep in mind you'll need to modify your Lease Agreement prior to implementation. You can't just start charging them next week. You'll have to wait for their current lease to expire and you can ask them to pay the utilities with the new lease.
We've done this a few times and most recently, we lowered the monthly rent some to offset the increase to a reasonable amount. We also created a spreadsheet to show the residents what they would have paid for utilities the year before based on the last 12 months usage. Doing this, along with the rental reduction, shows the residents that you aren't trying to gouge them, you're just trying to get them to pay their fair share. This will also increase your NOI by increasing your Other Income on the property even if you do lower the rental rate the first year. The letter also suggests ways they can help lower the overall bill by turning off the AC or Heater when they are at work, taking shorter showers, not letting the water run when they brush their teeth, notifying the PM if they have a leak in a faucet or the toilet, etc.
I highly recommend everyone do this as soon as possible. You'll be glad you did!!!
