What Are RUBS Utilities? A Guide for Property Managers
- DrizzleX
- 1 day ago
- 8 min read
Updated: 8 hours ago
Utility bills can eat into your profits fast, especially when you’re the one covering them. For many property managers, it’s hard to track who’s using what and even harder to split costs fairly.
You want tenants to be more mindful, but without a way to monitor utility usage or track shared services, managing utility bills becomes more complicated.
That’s where RUBS utilities apply. In this post, we’ll explain what RUBS utilities are, how the system works, and whether there are better alternatives for your property.
TL;DR
RUBS utilities divide shared utility costs using formulas instead of individual meters.
Charges are calculated using factors like unit size or number of occupants.
RUBS helps recover utility costs but doesn’t reflect exact tenant usage.
Clear communication and fair allocation reduce tenant disputes.
DrizzleX adds fixture-level data to spot leaks and lower water bills under RUBS.
What Is RUBS in Property Management?
Ratio utility billing system (RUBS) is a property management method for allocating shared utility charges among tenants in apartment buildings.
Property owners often use RUBS when installing individual meter readings is too costly. This is common in older buildings and some commercial real estate properties.
Instead of billing tenants based on actual consumption, the RUBS system estimates utility usage using specific factors outlined in lease agreements.
The utility billing process can be managed in-house or through a utility-billing company. Some landlords prefer using a provider to handle the monthly breakdowns and send bills to tenants.
The RUBS method splits the total bill using an allocation method based on factors such as unit size in square feet or the number of occupants.
Let’s look at how to calculate utility charges using both approaches.
Calculation Based on the Number of Tenants
One common way to calculate RUBS utilities is by using the number of occupants in each unit. This method is often used in a multifamily property.
To calculate charges, use the formula below:
Tenant’s Utility Bill = (Tenant’s share of total occupants ÷ Total number of occupants) × Total utility bill
Now, let’s say your particulars are:
Total water bill = $1,000
Tenant A has 2 people living in the unit
Total number of residents in all units = 20
Tenant A’s water bill would be: (2 ÷ 20) × $1,000 = $100
Calculation Based on a Unit Size
Another common RUBS calculation uses unit size to divide utility costs. This method assumes that larger units tend to use more utilities than smaller ones.
Tenant’s Utility Bill = (Tenant’s unit square footage ÷ Total square footage of all units) × Total utility bill
Our particulars are the following:
Total water bill = $1,000
Tenant’s unit size = 800 sqft
Total sqft of all units = 10,000 sqft
Tenant’s water bill would be: (800 ÷ 10,000) × $1,000 = $80
Which Utilities Are Included in the RUBS Billing System?
The RUBS method can be used to split several shared utility charges among tenants. While included services vary by property, RUBS programs most commonly cover the utility types below.
Water and sewer: These are the most frequently billed utilities under RUBS. Charges are often based on unit size or the number of occupants, since water use tends to increase with household size.
Trash collection: Trash service is typically billed on an equal-per-unit basis or by unit square footage, particularly in apartment buildings with similar usage patterns.
Gas: If used for heating, cooking, or hot water, gas bills can be shared using a RUBS formula.
Electricity (shared areas only): If common areas aren't separately metered, the cost of lighting hallways, laundry rooms, or stairwells can be divided among tenants.
Pest control and stormwater fees: When included in recent master utility bills, these charges can also be allocated through the RUBS system.
These utility charges are divided using a set formula and billed once per billing period. A resident’s utility bill may be included with rent or billed separately, depending on lease agreements and local regulations.
Pros and Cons of RUBS for Property Owners
Let's look at what advantages and disadvantages RUBS offer property managers and landlords.
Pros
Using the RUBS method allows property owners to recover shared utility charges without installing individual meters.
That keeps upfront costs lower and makes RUBS a cost-effective option for multifamily properties.
RUBS can also lower net operating expenses when utility costs shift to tenants. When a resident’s utility bill reflects shared usage factors, many tenants pay closer attention to water and energy use.
This often leads to lower overall consumption and fewer issues like tenant water damage.
Lower operating costs can improve net operating income (NOI). A higher NOI makes the property more attractive to buyers or investors, which can increase its property value.
Cons
While RUBS can offer cost recovery and improve utility management, it also comes with a few challenges.
One of the main concerns is tenant perception.
Since RUBS doesn’t measure exact usage, some tenants may feel the charges are unfair, especially if they use fewer utilities than their neighbors.
Let’s take a look at a sample scenario below:
Damien lives alone in a one-bedroom apartment. In July, he spent the entire month in Europe visiting family, and his apartment was empty the whole time.
No showers, no dishwashing, no toilet flushes. But when the bill arrived, Damien was charged $112 for water.
He immediately emailed the property manager:
“I wasn’t even in the country. Why am I paying for water I didn’t use?”
His portion of the bill was calculated based on the number of occupants, not actual usage. Damien was furious:
“So I could be watering the lawn daily or gone for weeks, and I’d still pay the same? That’s absurd.”
Situations like Damien’s show how RUBS can be unfair to tenants. This can lead to complaints, landlord-tenant disputes, or higher turnover when tenants question how utility charges are calculated.
How to Better Allocate Utility Costs With Tenants
Sharing utility bills with tenants can be tricky. You want it to be fair, easy to manage, and clear for everyone.
If done right, you can cover your costs without upsetting your tenants. Here are a few simple tips to help you allocate utility expenses more effectively.
Pick the Right Factors
Start with factors that reflect how utilities are typically used in your building. Common options include unit square footage, number of occupants, or the number of bathrooms.
These allocation factors help RUBS estimate utility usage and create a clearer link between utility consumption and what tenants pay.
Choosing the right factors is key to successfully implementing RUBS and setting expectations early.
Understand What Drives Utility Costs
Before splitting bills, review recent utility charges to see which services account for most of the expense. Water, gas, trash, and shared electricity often change month to month.
If water makes up most of the average water bill, the number of occupants usually has a direct correlation to usage. On the other hand, if heating costs are higher, unit size may matter more.
This type of property analysis supports fair distribution and makes utility charges easier to explain.
Make Billing Clear and Review It Regularly
Clear billing reduces confusion among tenants and landlords. When occupants understand how a resident’s utility bill is based on specific factors, they’re more likely to accept the charges.
Occupancy changes over time, so reviewing your cost allocation occasionally helps keep charges accurate and easier to explain.
Are There Alternatives to RUBS?
RUBS isn’t the only utility billing solution available. Some property managers consider other options when existing tenants raise concerns about shared billing.
One option involves installing meters at the unit level. Individual meters allow each resident’s utility bill to be based on actual usage.
Installation costs can be high, but this setup often leads to long-term cost savings and fewer billing disputes.
Property owners should review state regulations beforehand, since requirements vary and compliance matters.
Submetering water is another alternative. Submeters track usage within each unit without replacing the main meter.
This option works well for certain utilities, especially water, and helps distribute the total utility cost more precisely.
Many property managers use submetering to recover utility expenses while keeping operational costs manageable.
Flat utility fees remain an option as well. This method reduces administrative overhead, but it works best when usage is similar between units.
How DrizzleX Helps You Save Water and Money
DrizzleX helps property managers reduce water waste, lower utility bills, and make more informed decisions about water use.
Through fixture-level monitoring, the system highlights leaks, abnormal usage patterns, and inefficiencies that often stay hidden until bills increase.
A Greenville Property Cut Water Use by 38%
A multifamily property in Greenville, South Carolina, used DrizzleX to monitor water usage throughout three buildings with 54 units and 108 tenants.
Before monitoring, the property averaged 20,427 gallons of water per day. After one year with DrizzleX, daily usage dropped to 12,655 gallons.
With a local water rate of $6.11 per HCF, the property achieved an estimated savings of $17,839, a 38% reduction. DrizzleX identified dozens of leaks, many caused by running toilets.
One toilet leak alone costs an estimated $1,122 per month due to a flapper failure. These results show the numerous benefits of catching waste early rather than waiting for utility bills to spike.
How DrizzleX Detects Leaks at the Fixture Level
DrizzleX monitors water flow at individual fixtures such as toilets, sinks, and showers. Each reading captures usage in short intervals, which makes it easier to identify steady flow patterns caused by leaks.
When an issue appears, the system pinpoints the unit and fixture involved, helping maintenance teams ensure compliance with property standards.
Smarter Water Insights With AI Analysis
DrizzleX uses AI to compare each unit’s water usage against a large database of usage ranges and occupancy patterns.
The system considers location, climate, and demand trends to estimate how many tenants are likely in a unit.
While behavior changes can still affect results, this analysis helps property managers understand when a resident’s utility bill is based on normal activity versus unusual usage.
These insights can also encourage tenants to adjust habits once usage patterns are documented.
Better Planning and Long-Term Savings
A smart water monitoring system gives property managers reliable data to support billing decisions and system adjustments.
Whether paired with submetering or other billing methods, DrizzleX supports a smoother transition to usage-based billing.
When integrated with IoT systems, DrizzleX improves coordination between water monitoring and maintenance workflows.
FAQs About RUBS Utilities
How do you explain RUBS to tenants?
RUBS is a billing method used when utilities aren’t individually metered. It calculates a resident’s utility bill based on shared factors like unit size or the number of occupants rather than exact usage.
These factors are explained in the lease so tenants know how their charges are calculated.
How do RUBS work?
The RUBS process starts with the property’s total utility bill for the month. That amount is then divided among units using factors like square footage or the number of occupants.
Each tenant pays their share based on the same calculation method.
What does the term "RUBS" mean?
RUBS stands for ratio utility billing system. It refers to a billing method that allocates shared utility costs among tenants using defined ratios instead of individual meters.
What is included in RUBS?
RUBS typically includes shared utilities such as water, sewer, trash, and sometimes gas or electricity for common areas.
The exact utilities covered depend on what the property includes and what’s stated in the lease agreement.
