Make The Switch To Ratio Utility Billing and Sub-Metering
Increase Property Value
Apartment communities, mobile home parks, condominiums, townhomes, municipalities, commercial centers, and office buildings – real estate varies in size, configuration, type, and location. Regardless of these differences, the value of any multi-tenant property remains proportional to its net operating income (NOI). Lease or rental rate increases are one way to improve a property’s NOI, but increases that go too far beyond fair market rates lessen one’s chances to stay competitively priced. A fail-safe alternative is utility allocation, wireless submetering and automated, web-based billing software from Commercial Water & Energy Co.
How Utility Management Increases Property Value
If you look at the whole picture, then you can find the truth in the numbers. A reduction of net expense through water and energy conservation and recovery of utility expense adds to an owner’s net operating income. For instance, if property values are said to rise by 12 times the increase in annual net income, then a net reduction through conservation of $30 per month per unit increases a property value by $4,320 per unit. By recovering an annual water cost of $100,000 – shifting this amount from your expense statement to your operating income – through sub-metering and utility allocation, the value of your property increases by $1,200,000.
When a property’s net operating income is increased, the result is a greater loan and resale value to the owner. Not to mention, properties outfitted with utility sub-metering, allocation, and billing management systems have the curb appeal and financial draw buyers look for. Plus, when owners are able to increase their NOI without increasing rent, rates are competitive and vacancies are few and far between – yet another buyer incentive.
Contact Commercial Water & Energy to find out how you can improve your bottom line and increase your property value through effective and efficient utility allocation and sub-metering solutions and expense management services.