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Saving on Utility Expenses

If your properties are metered correctly, it is likely that your tenants are responsible for their own electricity, gas or oil. There are some utility expenses, though, that a landlord cannot avoid. Common area electricity and water/sewer charges are always paid by the building owner – there are a few steps you can take to help reduce your expenses on these utilities, adding to your bottom line almost immediately.

  • Electricity: Most buildings have some form of exterior or common area lighting paid for by the landlord. While you’ll never be able to avoid these expenses, small efforts will pay off in a big way when it comes to saving energy.
    • Changing all lights to LED bulbs is the best place to start. While they are more expensive up front, their longer lifespan and lower energy consumption combine to save money – and pay for themselves – in the long run. An average LED bulb lasts 50,000 hours, or 11 years when used for 12 hours per day. This is approximately 50 times longer than a typical incandescent bulb or 20-25 times longer than a typical halogen bulb. At a price of $2 per halogen bulb, you would spend $100 over the same time period vs $4-$8 for an LED bulb.
    • While exterior lights should be left on in the dark for safety, interior light fixtures can and should be installed with motion sensors. This will activate the lights only when it detects movement in the area, cutting down on electricity usage and increasing the safety of residents


  • Water: Water charges will be directly affected by the number of residents living in each unit/property. Similar to the measures taken to save on electricity, there are small improvements that can be made to reduce water consumption.
    • Low flow shower heads: a conventional shower head uses approximately 3.5 gallons of water per minute, equating to 35 gallons per shower for a 10 minute average shower time. By installing low flow fixtures in your rental unit, water consumption will be reduced to 2 gallons per minute, or 20 gallons during a shower of the same length. Over the course of a year that’s a savings of 43% of water used in a shower alone.
    • Sub-metering water for each unit: with a greater up front cost of a few hundred dollars per unit, this is a rare choice for many landlords, but still an option. Another drawback is the requirement for the landlord to pay the full water charge and then bill each resident separately for their own consumption. This is not a viable option in most markets.


  • Heat: While tenants will be responsible for their heating charges, when there is a vacancy during the heating season the landlord will be paying for heat in order to safeguard the property from frozen/burst pipes. Setting the heat at between 55 – 58 degrees keeps the apartment warm enough to prevent any potential damage while keeping your heating utility expenses in check.


Editorial Note: Opinions expressed here are the author’s alone. The contents of this blog should not be taken as legal advice. Always consult with an attorney.

Posted by: Anthony Lapolla on March 11, 2016
Posted in: Uncategorized