Utility Billing – Marketing Nightmare or Ancillary Genius?

One of the biggest issues with utility billing at existing apartment communities lies with current residents. They have never paid for water or gas or electric before.  It is a rent increase for them.  And it’s typically greater than any increase they have experienced.  So how do you prepare them for it and renew their lease?

First, inform them it is going to happen well in advance and more than once.  They will appreciate having the information and an opportunity to ask questions and prepare for the additional living expense.  It will also give you a period of time to gauge resident perceptions and backfill any residents who inform you they will be leaving after their current lease expires.

Second, many owners prefer to roll out the program over a 12-15 month period.  Begin by billing new residents only for a period of time.  This will allow existing residents to become accustomed to the idea that they too will be paying as your new residents will talk about it.  If their neighbor is already paying then it won’t be incomprehensible for them to pay in the future.  

Lastly, ensure that your entire staff is on board and educated about the program.  They must support it at all times.  They must be given the tools to answer any questions or respond to any negative comments made about such a program.  Utility billing is a lot more common today then it was ten years ago so many of your competitors may be doing it already.  Find out who and make sure your staff knows.  

Although water/sewer is the most popular utility that properties charge back to residents, gas and electricity is increasingly popular as the costs of energy soar. The good news about gas and electric billing is that it can contribute significantly to your properties’ NOI, and encourage residents to use the utility more responsibly. The bad news is that energy is expensive, and the costs can fluctuate dramatically by season which means that resident bills will be expensive and fluctuate dramatically by season. Be prepared to deal with residents who haven’t experienced the realities of paying energy bills before.

I had the pleasure of introducing water billing to management and residents at over 15,000 apartment units.  I only had one nightmare.  Utility billing is the best ancillary income program you can have.  Work with the provider you have selected to make sure you avoid any potential marketing nightmares.  Here are a few providers you should contact if you are interested:

www.aum-inc.com
www.nwpsc.com
www.sierrabilling.com

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