Utility Cost Recovery

Utility cost recovery is critical to maximizing a multifamily property’s NOI. Non-payments (and late payments) impact cash flow and the homeowner or property manager’s ability to properly budget. Of course, there are a number of factors that impact utility cost recovery. But (arguably) the most important – resident billing itself – is too often overlooked.

Why does billing matter so much? The answer is a mix of logistical and psychological factors. In this post, we’ll take a deep dive into three core ways that your billing – outsourced – can improve utility cost recovery.

Utility Billing Best Practices

  • Fair, defensible bills
  • Predictable timing and cadence
  • Positive resident experience

Fair, Defensible Bills

It has not been a pleasurable experience for housing providers who open their checkbooks or drop their credit cards for water, electric, or gas bills because of residents who pay late or do not pay at all. 

That’s why fair, defensible utility billing practices are so important. If a tenant receives a bill, they feel is unjustified – “How could I have used that much?” – the likelihood increases that the utility bill will go unpaid.

The answer is a well-planned Ratio Utility Billing System, designed to capture and bill a resident’s actual usage as accurately as possible. The system creates a sense of ownership on the part of the resident, as they can see how their actions dictate their expenses month to month. Studies have shown that individually calculated utility bills cause water, gas, and electric usage to drop as much as 35%

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This means two things:

  • Residents save money – and have the ability to directly impact their savings. This creates a differentiating factor for properties where billing is perceived as fairer.
  • The master utility bill is lower. There will almost always be some percentage of utility costs that can’t be recovered. If that number is 5%, it’s better than its 5% of $65,000 versus 5% of $100,000.

Predictable Timing and Cadence

Resident utility bills should be sent at the same time every month. Ideally, this means the same day of the month. While this might seem trivial, it can be a significant factor in utility cost recovery rates. Residents living on a fixed income or budgeting paycheck to paycheck expect certain expenses at certain times. A delay of even a few days can cause them significant hardship, and reduce their ability to remit payments. Establishing this cadence early in the homeowner-resident relationship – and sticking to it – is key.

Positive Resident Experience

“X” acronyms abound in the modern business climate. There’s “CX,” for “customer experience.” “UX,” for “user experience.” “BX,” for “buyer experience.” And the list goes on.

Here at Livable, we’re fond of “RX” – Resident experience.

It’s far easier to retain a good resident than it is to find a new one. The costs of advertising and showing a vacancy – to say nothing of $0 rent when a unit is empty – add up fast. And while paying a utility bill is nobody’s favorite task, you can make it as painless as possible by using our custom RUBS or our net-zero billing system. That means a happier resident – one having a better experience, and one more likely to renew their lease.


While there are many factors that contribute to recovery rates, arguably none matter more than billing itself. If bills don’t come across as fair, aren’t delivered consistently, and aren’t backed by solid customer service, recovery will inevitably suffer. And that’s a direct hit on NOI.

Of course, what we’ve outlined in this post doesn’t sound easy. The fact is, it isn’t. A housing provider or property manager – even one with several full-time staff members – probably doesn’t have time to do all we’ve listed above.

That’s why firms like Livable exist. We specialize in handling all aspects of utilities for mid-sized and large owners and property managers across the United States. We take care of the RUBS system, submetering setup (partnering with resellers and installers of submeter) to substantially lower your cost. Best of all, it all comes at effectively zero cost to the housing provider.

If your goal is to maximize utility cost recovery, Livable should be your next call. Learn why owners and property managers of tens of thousands of units trust us every month – connect with us at https://comesave.livable.com/meetings/livable/livable-discovery-call.


Livable is a full-service residential & commercial real estate billing partner. Focusing on bulk amenity/utility billing, our mission is to promote savings and conservation through education. Our suite of cloud services and end-to-end solutions helps to reduce monthly consumption, overall expenses and adds more money to your bottom line. To learn more, visit livable.com.