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How To Improve Your Property’s NOI With Smart Utility Expense Management

Updated: 1 day ago

Effective management of utility costs is important for property managers who aim to maintain profitability and drive sustainable operations. Understanding the importance of this aspect of property management can unlock huge cost savings and environmental benefits.


In this article, we’ll discuss the importance of proper utility expense management and its relevance to water usage. Additionally, we will present a strategy to lower your utility costs for increased NOI.


What is Utility Expense Management?


Utility expense management refers to the strategies and practices employed to monitor, control, and optimize spending on essential utilities like electricity, gas, water, and waste disposal. Utility expenses account for 15-20% of its overall operating expenses. 


Over the past few years, utility expenses have consistently risen across the nation, and that trend is likely to continue.


Good strategies  can help property managers gain insights into resource consumption, find any areas for conservation, and implement targeted cost-reduction measures.


Successful utility expense management requires many approaches that integrate various elements. These include detailed tracking of utility usage with real-time data, financial management tools for analyzing costs and streamlining payments, and automated billing systems.


Benefits of Comprehensive Utility Expense Management


Implementing a comprehensive utility expense management strategy can unlock a range of benefits for property managers:


  1. Cost savings: By closely monitoring and controlling utility consumption, property managers can implement cost-saving measures.

  2. Improved profitability: Optimizing utility expenses directly contributes to the overall profitability and increase the NOI of the property.

  3. Sustainability and environmental stewardship: Utility expense management often aligns with sustainability initiatives. It helps reduce energy and water consumption and promotes environmental responsibility.

  4. Enhanced decision-making: Data-driven insights generated through utility expense management empower property managers to make more informed decisions that can improve cost allocation and strategic planning.

  5. Tenant satisfaction: Effective utility expense management can also improve tenant experiences, as property managers can offer better-controlled and more predictable utility costs.


man looking at his utility bills

Utility Expense Management for Water Usage


Managing water expenses plays a significant role within the broader strategy for utility expense management. Water consumption can have a significant impact on overall utility costs, and costs for water in many districts are high and continue to rise. 


Reducing water usage also leads to lower energy usage for hot water heating.


The Role of Water Submetering Technology


Water submetering plays an important role in effective water management. Submeters provide precise usage data for each apartment unit so that property managers can identify and address high-consumption areas. 


Unfortunately, water submeters cannot be installed in many buildings because there are no water mains to each apartment unit.  But not to worry – there are innovative solutions on the market.


Utility Expense Management with DrizzleX Water Submetering System


DrizzleX uses innovative micrometers that are easily installed on all water fixtures and continuously measure water flow. The micrometers are connected to an online dashboard hosted in the cloud that allows for real-time monitoring of water usage and leaks and sends valuable data and alerts to building management. 


DrizzleX's utility services can significantly enhance utility bill management through several mechanisms inherent to its technology and deployment:


Detailed Consumption Tracking


By installing micrometers on all water fixtures within an apartment and common areas, DrizzleX enables precise tracking of water usage down to individual fixtures. This detailed consumption data is crucial for understanding where and how water is used within a property.


Managers can pinpoint areas with high usage and investigate whether these patterns are due to leaks, tenant behavior, or inefficient fixtures.


Real-Time Monitoring and Alerts


The IoT-based system provides real-time monitoring of water flow, which is crucial for actively managing utility expenses. By adopting IoT cloud-based solutions, property managers can benefit from higher billing accuracy and efficiency, as well as real-time access to energy usage data and insights. This enables proactive management and cost-optimization strategies.


Immediate alerts for irregularities, such as leaks or spikes in usage, allow property managers to rectify issues before they escalate into more significant, costly problems.


Individualized Billing


With DrizzleX, property owners can bill tenants for their actual water usage rather than using estimates or flat rates. 


This not only encourages conservation among tenants but also ensures that each tenant's cost is fair and based on their actual consumption, potentially reducing disputes and improving cost recovery for water usage.


Reduction in Water Waste


The ability to detect leaks and overuse in real-time allows for quick interventions, significantly reducing water waste. 


Addressing leaks promptly prevents larger volumes of wasted water, which directly improves energy management.


Predictive Maintenance


Beyond immediate leak detection, the data provided by DrizzleX can help in predictive maintenance strategies.


By understanding typical water use patterns and finding outliers, maintenance can be scheduled proactively. This can reduce emergency repair costs and help extend the lifespan of plumbing infrastructure.


How DrizzleX Can Help You


DrizzleX allows you to detect hidden leaks, such as running toilets and leaky faucets, to stop millions of gallons of waste each year. It also alerts you to tenants' excessive water overuse. Typically, buildings that use DrizzleX reduce their water bills by 20-40% or more.


And you can expect a pretty quick return on investment (ROI). Buildings with DrizzleX save enough water to cover the entire cost of DrizzleX within about 9 months on average.


drizzlex home page


Usage Reports


One of DrizzleX's solutions is the "Tenant's Overuse" report. Since many people aren't really aware of their excessive water usage, an accurate report can be very helpful in preventing unnecessary expenses.


Using the reports, you can communicate with your tenants about their water consumption habits and back them up with precise data.


Leak Detection


Leaks can be sneaky because they aren't always visible. With property inspection, you can see the obvious ones. But silent leaks will only show up on your utility bills. DrizzleX gives you water control because you can monitor the water flow in your building.


The system will notify you about where and how much water is being lost.


E-mail Notifications


Once DrizzleX spots the leak, it will notify you via email. The message you receive will include all the details about the exact apartment and fixture that is the culprit, how many gallons were used, how much it will cost you if the problem isn't fixed, and even possible causes for the water waste and how to fix it.


Billing


DrizzleX also allows you to bill your tenants. Tenants conserve water when they are the ones paying for it. You can easily create water bills based on accurate water consumption and bill them fairly.


FAQs About Utility Expense Management


What is vacant unit cost recovery in utility expense management?

Vacant unit cost recovery involves recapturing utility costs from temporarily unoccupied units. It guarantees that expenses are accurately attributed and not unnecessarily absorbed by the property owner.


How can utility billing errors impact a business?

Utility billing errors can lead to financial losses if overcharges go unnoticed or billing discrepancies are not resolved immediately.


What are the benefits of efficient utility invoice processing?

Efficient utility invoice processing helps prevent late fees, improves cash flow, and assures accurate budgeting and forecasting.


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