If you rent out residential or commercial property, you’ve probably wondered how to bill your tenants for the energy they consume. This is usually handled in one of two ways: square footage based billing and fair billing.
Square Footage-Based Billing
This simple practice consists of billing your tenants proportionately based on the square footage of their space. For example, let’s say this month’s electricity bill is $600. You have two tenants: one rents a 1,000 square foot space for a family of four; the second is an individual who rents a 5,000 square foot space and is never home. Based on the size of their units, the first tenant would pay $100 and the second would pay $500, regardless of how much energy they actually used during that time period. This essentially punishes tenants for renting larger spaces, and should be avoided if possible.
Property managers who don’t want to rely on the arbitrary square footage-based billing method can easily utilize fair billing. Fair billing charges tenants for how much electricity they actually consume.This is done through the application of submeters. These devices track how much energy is consumed by each individual unit, allowing tenants to be charged for what they use each month. Tenants like this because it’s fair. It also encourages them to conserve energy, since they directly benefit from the savings. In addition, fair billing also benefits the property manager. With automatic billing and fair division among tenants, it becomes even easier to market your property and attract new customers — not to mention, submetering is tax-deductible, increases your property value, and reduces operating costs.
Electro Industries has been helping property managers across the globe submeter their tenant’s spaces and save energy and money for more than 40 years. Contact us today to learn how our power monitoring products can benefit your business: call (866) 928-7908.