Building Leaner Operations for Post-Pandemic Property Management
As we continue to navigate the effects of the pandemic, multifamily, and commercial property owners are learning how to adjust to the new normal. Now that more people are working from home, vacancy rates of commercial office spaces have increased. According to the U.S. Energy Information Administration, while commercial electricity usage decreased by 12 percent in 2020, residential use increased by three percent. With the shift in electricity demand from the commercial sector to the residential sector, it’s possible that electricity usage won’t return to pre-pandemic levels anytime soon.
These changes present opportunities for property management software and service providers to improve post-pandemic property management by meeting the market’s changing needs. As their customers look to implement popular initiatives related to tenant utility billing, energy conservation, and increased vacancies, software and service providers can support their needs by incorporating more automation into their solutions.
Help offset rising costs with tenant utility billing
Electricity isn’t the only utility on the rise; water rates are also up substantially. An analysis of 12 U.S. cities found that the combined price of sewage and water rose by an average of 80 percent between 2010 and 2018. The decline in federal funding for water systems and years of neglected maintenance has impacted the current infrastructure and contributed to the increasing water rates.
To overcome this burden in post-pandemic property management, property operators can pass the rising cost of utilities on to residential and commercial tenants to reduce expenses. A growing trend amongst property owners is ratio utility billing (RUBS), which calculates a tenant’s utility consumption based on square footage, occupancy, and the number of bedrooms. Property management applications that support RUBS rely on automated access to utility data and enable property owners to maximize net operating income.
Develop incentives to encourage energy conservation
A first step towards improving energy conservation with tenants is awareness of how much they are using. For those properties that want to convert from master billing to individual unit billing to encourage conservation, RUBS is becoming a good alternative. Even when tenants can’t be charged, some property managers are incentivizing their occupants to be more energy efficient.
An experienced Ratio Utility Billing Systems specialist can help owners dramatically reduce consumption at their properties by making residents financially responsible for their usage. RUBS provider Livable often hits double-digit decreases in buildings that implement its best-in-field RUBS program. For example, in a fully occupied 4-unit building, water and electricity use went down 31 percent in the first year that Livable’s customizable RUBS system was implemented. Use increased the following year due to COVID shelter-in-place measures, but not significantly.
“With our RUBS program, building residents quickly adopt a conservation culture.”
Daniel Sharabi, CEO of Livable
Livable has seen similar reductions across property sizes, with even a 300-plus building showing a 24 percent reduction in usage and an 89 percent recovery rate for the owner. In this case, that meant over $180,000 recovered in just one year of RUBS. “We always see reduced consumption after RUBS is implemented,” said Sharabi. “That’s true in buildings with four units or 400 units.”
Additionally, since housing providers can recover close to 90 percent of their water and energy costs through RUBS, they can shoulder more of these utility bills during the pandemic. They could then pass along a “goodwill deduction” to help their tenants weather these uncertain economic times.
Reduce the costs of maintaining vacant units
Due to rising vacancies, net operating income across portfolios has been negatively impacted, forcing property managers/owners to seek tools that improve operational efficiency. A Nareit study expects multifamily vacancy rates to increase by 5.8 percent in 2021, while rents are expected to decrease, ultimately leading to an overall decline in gross income. Larger markets like New York, D.C., San Francisco, and Miami are expected to perform even worse.
Leveraging automation can support faster vacant bill processing leading to huge savings.
Despite a relatively strong demand for logistics space used to ship goods bought on the internet, the accelerated pace of construction led to higher vacancies of industrial properties. Past recessions suggest that office vacancy rates will continue to rise throughout 2021 and perhaps peak in early 2022. While properties are unoccupied, utility bills are the property owner’s responsibility and control over energy costs. Leveraging automation can support faster vacant bill processing leading to huge savings.
Support post-pandemic property management operations with automation
Incorporating automated access to tenant utility accounts into your property management software or service can streamline processes while also providing accurate utility usage data to your customers. With reliable and direct access to utility data, you can help multifamily and commercial owners change their approach to post-pandemic property management and improve conservation efforts, tenant utility billing, and tackle vacancies.
To learn more about how Urjanet can help strengthen your operations during and after the pandemic, speak to an expert today.
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About Ma-Keba Frye
Ma-Keba Frye is a Content Marketing Associate at Urjanet, assisting with content development and execution. When she's not writing, she enjoys reading, listening to music, and volunteering.