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This guide is built for residential, commercial, and retail property owners and managers. Here's how to cut costs, stay compliant, and improve tenant satisfaction with unit-level water tracking.
If you manage or own a property, you know that water costs can quietly erode profitability. Rising utility rates, aging infrastructure, and unpredictable tenant usage make budgeting for this expense an absolute nightmare.
Enter water submetering. It’s a proven solution that can be achieved by assigning water costs fairly and encouraging tenants to conserve. This technology empowers property owners to gain visibility into actual water consumption at the unit level, streamlining billing and reducing disputes.
According to the Environmental Protection Agency (EPA), a two-year study of water billing practices in the multifamily residential sector showed that submetering was found to achieve statistically significant water savings of 15.3 percent (21.8 gal/day/unit). Additionally, (and this is where it gets interesting), there was no evidence that RUBS (more about RUBS in a moment) reduced water use by a statistically significant amount compared with traditional in-rent arrangements. In fact, the data showed that the difference between water use in RUBS and in-rent properties was not statistically different from zero!
WOW!
This is the solid proof you need that submetering is a highly effective way to reduce water consumption while significantly lowering your water expense!
But how does submetering work exactly? What types of properties benefit the most? And how can you implement a submetering system with minimal disruption?
This guide covers everything you need to know. Everything from the basics of water submetering and key benefits, to regulatory considerations, ROI, and case studies showcasing real-world savings.
Whether you manage a 50-unit apartment building, oversee an HOA, mobile home park, or develop new commercial spaces, understanding water submetering can improve your net operating income (NOI), compliance confidence, and tenant satisfaction.
Water submetering means installing individual water meters for each rental unit or commercial tenant, so water consumption is measured and billed separately. This differs from master-metering, where the entire property’s water is tracked by a single meter and the expenses are divided across units (often unfairly).
Submeters can be mechanical or digital devices attached either inside the pipes (in-line) or externally (over-the-pipe). Modern systems often feature smart meters capable of transmitting usage data wirelessly to cloud-based dashboards. This automation eliminates manual meter readings, saving time and reducing errors.
Many properties without submeters rely on RUBS, which estimate each tenant’s water share using formulas based on unit size or occupancy. While easier to implement, RUBS may be costing you more than you think:
Submetering fixes these issues by providing accurate, unit-specific billing, helping to promote water conservation and fairness.
Here are the different types of water submeters.
When property managers talk about utility expenses, water almost always comes up first. It’s one of the few costs that feels impossible to control. Rates climb year after year, leaks stay hidden until the bill arrives, and tenants often shrug off waste because they don’t see the true price of what they use.
That’s where submetering comes in and changes everything! By putting usage information in the right place (at the unit level), owners can finally shift from managing surprises to managing facts.
Let’s take a closer look.
One of the most immediate benefits of submetering is cost recovery. When a property uses a single water meter for the entire building, owners often end up paying for the water that tenants consume. A submetering system lets you measure each unit’s usage and bill tenants accordingly.
This accuracy does more than just prevent overpaying. It encourages conservation. Tenants see their water usage in real terms and naturally adjust their behavior. Studies show that submetering can reduce water consumption by approximately 15–30%. That’s a direct savings on utility bills.
Recovering costs also frees up cash flow for other property investments. Every dollar you save or recoup from tenant water billing is a dollar that can be reinvested in maintenance, upgrades, or simply improving your bottom line.
Every dollar recovered through submetering directly improves net operating income (NOI). Imagine a 50-unit building with a $50,000 annual water bill. If submetering allows you to recover 80% of that cost, you’re adding $40,000 back to your NOI.
This increase in NOI doesn’t just help with monthly cash flow; it also boosts property value. Investors and lenders look closely at NOI when evaluating a property. A building that recovers utility costs efficiently becomes more attractive and can command higher valuations.
In addition, submetering reduces administrative overhead. Instead of manually estimating bills or resolving disputes, staff can rely on data from property water meters. Time saved translates into lower operating costs and improved efficiency.
Local and state regulations around water billing are evolving. In many jurisdictions, multifamily properties are required to install submeters, and billing practices are increasingly regulated. By implementing a submetering system, you stay ahead of compliance requirements and avoid potential fines and legal headaches.
Whether you manage apartments, HOAs, mobile home parks, commercial properties, or something else, staying compliant protects your investment. Future-proofing your property means installing the right smart water meters now so you won’t have to retrofit later. It also ensures your billing practices remain transparent and defensible under regulatory scrutiny.
Compliance isn’t just about avoiding penalties. It also bundles credibility with tenants, investors, and regulators. A property that meets legal standards and tracks usage accurately signals professionalism and responsibility.
Nothing frustrates tenants more than paying for water they didn’t use. A water billing system based on accurate submeter readings ensures each tenant pays only for what they use.
This transparency reduces disputes and fosters trust. Tenants understand exactly how their bills are calculated, making them more likely to view their rent and utilities as fair. This is especially important in competitive rental markets, where tenant satisfaction can influence lease renewals and occupancy rates.
Submetering also aligns incentives. When tenants see their individual usage, they naturally take steps to conserve water, which benefits both them and the property owner. Fair billing creates a win-win scenario. Tenants save money, and properties save resources.
Leaks are a hidden drain on property budgets. Even a small drip can add hundreds of dollars to a monthly water bill and cause long-term damage to infrastructure. And landlords are usually at the mercy of their tenants to submit a maintenance request when a drip or other maintenance issue occurs. If they don’t, you, the landlord, will be left footing the bill. This is just another reason to opt for a water submetering system. Especially with so many easy options now available to make that happen.
Water submetering isn’t just about accurate billing. It reduces the operating costs, increases NOI, ensures compliance, fosters tenant satisfaction, and protects properties from costly leaks. For property professionals, it’s a practical, results-driven solution that pays for itself in both savings and peace of mind.
One reason property managers tend to hesitate when it comes to submetering is the complexity of the local regulations. The rules differ by state, city, and even county.
However, most cover the same key areas.
Tenant Notices – Leases or billing statements often need to spell out how submetering works. This usually means notifying tenants about the terms of the lease and the billing process. But it also means notifying them about how the system works and how the charges are calculated.
Billing Limits – Billing standards may limit the fees you can charge or require clear itemized charges.
Installation Standards – Installation rules cover plumbing codes and may specify which type of smart water meters are allowed.
Tenant Protections – These protections ensure that owners can’t pass unrelated costs onto tenants.
Examples:
Understanding these rules is extremely important. Partnering with a provider who knows local laws, like SimpleSUB Water, can help property managers avoid fines, legal challenges, and disputes with residents.
For any property owner, the peace of mind of just knowing that their water billing system complies with local rules is as important as the cost of the savings themselves!
Disclaimer: This information is for general guidance and is not a substitute for legal advice. Landlords should consult with an attorney for specific guidance regarding their individual circumstances.
Transitioning to a submetering system might seem intimidating, but the process is manageable and predictable.
Let’s break it down step by step. Then all you have to do is follow it.
A technician will examine your plumbing, unit layouts, and existing billing setup. This step determines which type of water meter will work the best. And it will reflect how the installation can be done with minimal disruption.
Choosing the right technology is probably the most important step. New builds often use in-line meters for precision. Older buildings benefit from over-the-pipe cellular water meters for retrofits. These strap over existing pipes and transmit usage wirelessly. They are also less invasive and easier to install without having to shut down the water for extended periods of time.
Installation is generally quick. A well-planned project may only require temporary water shutoffs (if any at all).
After installation, meters link to a dashboard, making water usage monitoring simple and centralized. Managers can access data at a glance, spot anomalies, and prepare accurate bills.
Communication with tenants is essential (unless you want to create a nightmare for yourself). Rolling out a new water billing system requires clear explanations of how the bills are calculated, what changes to expect, and why the system is fairer. When tenants understand that they will pay only for what they use, acceptance rates increase, and disputes decline.
Submetering pays for itself quickly (in most cases).
Here’s how…
Let’s say a property spends $60,000 per year on water. Submetering cuts that usage by 20%. That equals $12,000 saved!
$48,000 is recovered from tenants. That equals $48,000 billed back.
So, the TOTAL BENEFIT IS: $60,000 EACH YEAR!
Here’s the breakdown:
$60,000 water cost per year.
$12,000 saved by less water usage.
$48,000 billed back to tenants.
= $60,000 TOTAL BENEFIT
The indirect benefits add to the ROI as well. Billing disputes decrease because tenants clearly understand what they owe. Staff spend less time on customer service and problem resolution. Satisfied tenants stay longer. And that reduces turnover (and the associated costs).
When considering all these factors, the ROI of installing water submeters in rental properties is compelling, even for smaller portfolios.
Here is a quick overview of how the different property types will benefit from water submetering.
These types of properties benefit from submetering by increasing fairness and encouraging water conservation. Residents are more likely to accept rent levels when they know water is billed individually. Reduced consumption also aligns sustainability goals and can improve a property’s appeal.
These types of properties often face disputes over shared utilities. Installing the best water submetering system for HOAs and mobile home parks helps resolve disagreements by assigning clear responsibility. This not only improves community relations, but it also simplifies financial management for boards and park managers.
These types of properties, which include offices and rental spaces, benefit in different ways. A water submetering system separates tenant usage accurately. This reduces disputes over shared expenses and simplifies the billing under triple-net leases.
New construction projects have it much easier. They can integrate the submeters during the building phase. This helps ensure long-term compliance, cost recovery, and sustainability reporting. Developers can market these properties as cost-conscious and environmentally friendly, giving them an edge in a competitive market.
Selecting a provider is as important as the meters themselves. Look for a partner who offers a full-service solution. Everything from submeter installation to billing support and ongoing monitoring. This reduces the burden on your staff and ensures consistent, reliable results.
The right partner will also understand local rules and help ensure compliance. They should provide flexible technology options, including wired, wireless, and cellular meters, so that each property can be fitted appropriately. Integration with existing property management software is a bonus, allowing usage data to flow seamlessly into accounting and billing systems.
Support is extremely important! We can’t state that enough! A responsive team can handle tenant questions, troubleshoot installation issues, and provide data for reporting or sustainability tracking. By carefully choosing a water submetering partner for property management, property owners and managers can simplify the rollout and maximize the long-term benefits.
Here is a checklist of what to look for in a submetering partner.
Submetering is changing quickly thanks to new technology and growing regulations.
Smart water meters now offer real-time monitoring, automatic alerts, and integration with building management systems. This allows managers to spot leaks instantly and take action before costs escalate.
Sustainability reporting is another growing driver. Investors, municipalities, and tenants increasingly expect data on resource usage. Submetering provides a reliable way to meet these expectations and track progress on conservation goals.
Over time, submetering is likely to become standard practice across multifamily, HOAs, mobile home parks, new construction, and commercial properties. It will increasingly integrate with energy, HVAC, and lighting systems, giving property managers a full view of building efficiency. Early adoption gives owners better control over costs, compliance, and tenant satisfaction. And, as we said before, this is what will set you apart in a competitive market!
The trend is clear! Submetering is moving from “nice to have” to “standard practice” in property management.
Water costs don’t have to drain your budget or create friction with tenants. By investing in property water meters and a complete submetering system, property owners can recover costs, reduce usage, and detect leaks before they become expensive problems.
From multifamily buildings, to HOAs, to mobile home parks, to commercial properties, and new construction, the benefits are CLEAR! Tenants pay only for what they use. Disputes drop. And savings go directly to the net operating income. Implementing a water billing system with tenant water billing ensures fairness while improving property value.
Whether you are considering how to bill tenants for water usage fairly, installing over-the-pipe cellular water meters for retrofits, or simply want to explore the benefits of water submetering for landlords, now is the time to act. Early adoption offers both financial rewards and peace of mind.
If your goal is to control utility costs, boost sustainability, and improve tenant satisfaction, planning a submeter rollout today is the smartest move you could make.
Partner with a trusted provider today. You can then implement your meters and start enjoying the benefits of water conservation, cost recovery, and accurate water usage tomorrow!
Get in touch with SimpleSUB. We’d love to show you just how much water submetering can add back to your bottom line.
The sooner you install your submeters, the sooner you’ll see the savings!
DISCLAIMER: The information provided in this guide is for general educational and informational purposes only. It is not intended as legal, financial, or engineering advice, nor should it be relied upon as a substitute for professional consultation. Property owners and managers should consult with qualified experts, local authorities, and licensed contractors before making decisions regarding water submetering, tenant water billing, or related utility management practices. SimpleSUB Water makes no representations or warranties, expressed or implied, about the accuracy, completeness, or applicability of the content in specific situations. All utility regulations, building codes, and compliance requirements vary by jurisdiction and are subject to change.
We’ll design an affordable, easy-to-install solution for your submetering project, large or small.
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