What Is RUBS Utilities? A Simple Guide for Property Managers
- DrizzleX
- 5 days ago
- 9 min read
Utility bills can eat into your profits fast, especially when you’re the one covering them. For many property managers, it’s tough to track who’s using what, and even harder to split the costs fairly.
You want tenants to be more mindful, but without a way to monitor utility usage or track other utilities, it feels like guesswork.
That’s where RUBS comes in. In this post, we'll break down what RUBS utilities are, how this system works, and if there are better alternatives to this system.
What is RUBS in Property Management?
RUBS (Ratio Utility Billing System) is a method used in property management to allocate utility costs among tenants.
Property owners often use RUBS when installing meters is too costly or not possible. The utility billing process can also be managed in-house or through a third-party provider. Some landlords prefer using a provider to handle the monthly breakdowns and send bills to tenants.
The RUBS method splits the total bill based on factors like unit size in square feet and the number of occupants. Let’s look at how to calculate in both ways.
Calculation Based on the Number of Tenants
For calculating based on the number of occupants in a unit, we use the formula below:
Tenant’s Utility Bill = (Tenant’s share of total usage factors) × Total utility bill for the property
Now, let’s say your particulars are:
Total water bill = $1,000
Tenant A has 2 people living in the unit
Total number of people across all units = 20
Tenant A’s water bill = (2 ÷ 20) × $1,000 = $100
Calculation Based on a Unit Size
Now let’s look at the formula for calculating based on a unit’s size.
Tenant’s Utility Bill = (Tenant’s unit sqft ÷ Total sqft 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 = (800 ÷ 10,000) × $1,000 = $80
Which Utilities Are Included in the RUBS Billing Process?
The RUBS method can be used to split many types of utility costs among tenants. While each property may include different services, here are the most common utilities included in the RUBS billing process:
Water and sewer – These are often part of the total utility cost. Charges may be based on unit size or the number of people living there.
Trash collection – Usually billed equally or based on unit square footage.
Gas – If used for heating, cooking, or hot water, gas bills can be shared using a RUBS formula.
Electricity (shared areas only) – If electricity is not separately metered, the cost for lighting shared spaces like hallways or laundry rooms can be divided.
Pest control – If this service is included in the utility contract, it can be billed separately through RUBS.
Stormwater or drainage fees – Some utility providers include this in the total bill, and it can be shared through the system.
These charges are usually divided based on a set formula and billed once per billing period. Tenants then make utility payments along with rent or in a separate monthly bill, depending on how the property manager sets it up.
Pros and Cons of RUBS
Let's look at what advantages and disadvantages RUBS offer property managers and landlords.
Pros
Using the RUBS method can offer several benefits. First, it helps recover utility expenses without the need for installing meters. This leads to cost savings on equipment and installation. Owners also see lower operational costs over time, since they’re not paying the full utility bill out of pocket.
RUBS supports efficient management by holding tenants more accountable. When residents pay a share of the bill, they’re more likely to conserve utilities, which can lower the building's total utility consumption and help landlords avoid tenant water damage.
When the building’s expenses drop, the net operating income (NOI) goes up. 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?”
The answer? RUBS. 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, disputes, or even higher turnover if residents are unhappy with how they’re billed.
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 the smart way.
Pick the Right Factors
To allocate costs fairly, start by picking what makes the most sense for your property. You can split costs based on unit square footage, number of people living in each unit, or even the number of bathrooms.
These are called allocation factors, and they help match each tenant’s share to how much they probably use.
Understand What Drives Utility Costs
Before you decide how to split bills, it's helpful to understand where your money goes. Your total utility costs are usually based on services like water, gas, trash, and sometimes shared electricity. These charges can change month to month, depending on usage and rates.
To make things fair, your allocation factors should be based on what drives those costs. For example, if water is your biggest expense, you might focus more on the number of people in each unit.
If heating is the main cost, unit size might matter more. Knowing the key factors behind your utility bills helps you set up a system that feels fair to everyone, matches real use, and helps you save water, gas, and other utilities.
Make Billing Simple and Clear
Good billing management goes a long way. Be clear about how you split the bill.
If tenants know how you came up with the numbers and see that it’s based on real factors, they’re more likely to accept it without complaints.
Check and Update Over Time
Things change. Maybe more people move into a unit, or someone moves out. It’s a good idea to check your billing setup every so often.
If something feels off, adjust it. That way, you keep things balanced and fair for everyone.
Are There Alternatives to RUBS?
RUBS works for many properties, but it’s not the only way to share utility costs. If you want more accuracy or less pushback from tenants, there are other options worth considering.
Install Individual Meters
The most straightforward option is to install separate meters for each unit. This lets tenants pay for exactly what they use. It’s fair, easy to understand, and encourages people to use less.
While the upfront cost can be high, this setup often leads to lower tenant complaints and fewer billing issues over time.
Try Submetering Systems
Submetering systems are another way to track use by unit, but without replacing the main meter.
These water-saving devices measure water usage for each apartment and can be added to many buildings. They help you bill based on actual usage, which tenants usually see as fairer than formulas.
DrizzleX’s submetering solution makes water management simple and smart for multi-family buildings.
Its special micrometers go on every water fixture in each apartment, like sinks, showers, bathtubs, and toilets, plus fixtures in common areas such as laundry rooms and hose bibs.
These micrometers measure how much water each fixture uses and send the data to the DrizzleX cloud gateway using a dedicated frequency.
Use Flat Utility Fees
Some property owners choose to charge a flat monthly fee for utilities. It’s simple and easy to manage.
But it works best when utility use is similar across units. If one unit uses way more, it can feel unfair to others.
LA Building Saved Over $65K in Water Bills with Smart Micrometers
This real-world case study shows how a 65-unit building in Los Angeles cut water usage by 38% and saved $65,797 in just 8 months using DrizzleX.
Before the upgrade, the property was using 21,393 gallons of water daily, costing an average of $221 per unit each month.
After installing DrizzleX, average daily usage dropped to 13,326 gallons, and monthly costs fell to $138 per unit.
That’s a savings of 5 HCF per unit every month, all without changing tenant behavior. With 149 tenants and high local water rates ($16.79/HCF), the impact was huge.
This is a strong example of how smart water leak detection can cut costs and boost efficiency for multifamily buildings
How DrizzleX Helps You Save Water And Money
DrizzleX helps you catch water waste before it turns into high bills. It detects hidden leaks like running toilets and slow-dripping faucets, problems that often go unnoticed but waste gallons every day.
It also alerts you when tenants are using too much water. On average, buildings using DrizzleX cut their water bills by 25% to 45%.
Most properties see a return on investment in just 9 months. That’s because the water savings quickly add up.
Know Where Water Is Going
With DrizzleX, you get detailed reports that show water use for each unit. These reports are easy to understand and give you the data you need to talk with tenants about their usage.
Many people don’t realize they’re overusing water. Once they see the numbers, they’re more likely to cut back.
Stop Hidden Leaks Early
Leaks aren’t always easy to spot. DrizzleX monitors water flow constantly, so it can catch silent leaks long before your bill does. The system shows exactly where the leak is, how much water is being lost, and how fast it’s adding up.
Get Alerts by Email
As soon as DrizzleX finds a leak, it sends you an email. The alert tells you the unit and fixture causing the issue, how many gallons are being wasted, what it could cost you, and even tips to fix it.
Fair Billing for Tenants
You can bill tenants based on how much water they actually use. When people pay for their own water, they usually waste less. DrizzleX gives you the tools to create simple, accurate water bills based on real usage.
Smarter Water Management With AI Predictions
DrizzleX shows you past data and helps you plan ahead. With AI-powered forecasts, you can see how much water each unit is likely to use for the rest of the month and the next two months.
To unlock this feature, a unit needs at least 12 months of water usage data. Once that’s in place, you can view monthly predictions at the unit level.
To view the predictions, go to the property you're interested in, select the building, choose the specific unit, and then click on the Chart tab to see the monthly water usage forecast.
FAQs About RUBS Utilities
What are RUBS utilities?
RUBS stands for Ratio Utility Billing System. It's a billing method used by property owners and property managers to split utility costs among tenants in multifamily properties when individual utility meters aren’t installed.
The RUBS system uses allocation factors like unit size, number of occupants, or square footage to calculate each unit’s share of the total utility expenses.
How do RUBS work?
RUBS billing takes the master utility bills and breaks them down by using an allocation method such as square footage, number of residents, or bedroom count.
This rubs process helps property managers allocate utility costs fairly when individual utility usage can’t be tracked through meters.
It also reduces administrative overhead and helps recoup utility costs that would otherwise be hard to recover.
What does RUBS cover?
A RUBS program can apply to most utility types, including water, sewer, trash collection, gas, and electricity. These shared utility costs are typically added to the tenant's monthly rent statement.
It’s a cost-effective billing system that helps allocate shared utility costs and promote utility conservation without needing to install individual utility meters for every unit.
What are the cons of RUBS?
One downside is that the ratio utility billing system (RUBS) doesn’t reflect each tenant’s exact utility usage, which can lead to complaints about fairness. Tenants in larger units or with more people may feel the rubs formula overcharges them.
Is RUBS legal?
Yes, RUBS is generally legal. However, issues can come up depending on local regulations and lease agreements, and it can be harder to influence utility usage when utility charges aren’t based on exact utility consumption.
