David Schwartz
Like most landlords and property owners, you're most likely on the lookout to improve both the value and profitability of your properties. Perhaps you're also looking for ways to cut down on utility bills. It turns out that these two challenges are intricately linked.
According to an Energy Star report, reducing energy use by 15 percent in a typical 250-unit master-metered community will boost net operating income and can enhance asset value by over $1 million (with a 6 percent capitalization rate). In a similarly sized, individually-metered community, the same savings may increase asset value by roughly $200,000 annually.
The Struggle with Utility Bills in Multi-Unit Buildings
With utilities eating up 25 to 35 percent of overall operating costs in multi-unit buildings, shaving off utility costs can prove to be an uphill climb for most property owners.
First, getting tenants involved is a challenge (sometimes it's even the landlords themselves).
Second, utility costs can rise each year. The 2015 Price Index of Operating Costs by The New York City Rent Guidelines Board (RGB) illustrates this perfectly. The report revealed that utilities in the area increased by 1.2 percent from the previous year, owing mostly to an increase of 3.35 percent in water and sewer charges in 2015. Also, there's the assumption that saving on utilities in multi-family buildings calls for large-scale efforts and huge upfront investments.
You don't have to be a total scrooge and push your tenants to perpetual doom by scrimping on their heating needs or limiting their water supply.
Below are several tactics that don't require a major revamp of each unit or shelling out large upfront fees to reduce utility costs for multi-unit buildings.
11 Ingenious Ways to Reduce Utility Costs in Multi-Unit Buildings
As a responsible property owner or manager, it is your job to keep your units as energy efficient as possible while ensuring tenant comfort at the same time with the following:
Lighting
#1: Go with LED Bulbs
Forget incandescent light bulbs. Instead, it's time for your building to get with the times and use compact fluorescent lamps (CFLs), halogen incandescent bulbs, or LEDs. Aside from the fact that incandescent light bulbs generate more heat than light, CFLs use 75 percent less energy than the former and can last 10 times longer. LEDs are even more impressive, lasting 25 times longer than incandescent light bulbs.
#2: Use Sodium Bulbs Outside
High-pressure sodium bulbs are more efficient for outdoor use and they last longer too.
#3: Take Advantage of Natural Light
Reduce lighting in common spaces where natural lighting is abundant. If possible, measure lighting levels based on local or national building standards and remove excess lighting when necessary.
Heating and Cooling
Heating and cooling account for roughly half of the average utility bill.
#4: Reflect the Radiators
Place a sheet of aluminum foil or heat-resistant radiator reflectors between outside walls and the radiator to reflect heat back into the room.
#5: Use Newer Power-Efficient Tech
Replace old exhaust fans in bathrooms, kitchens, and utility closets with newer, more efficient models.
#6: Replace Air Filters Regularly
Get in touch with your trusted HVAC provider often to maintain or replace AC and furnace filters when necessary. Furnaces use less energy if they're clean and "breathing" properly. If your building is located next to a construction site or a busy highway, change filters more often.
#7: Block the Rays
Use light blocking curtains in common rooms and encourage tenants to do the same for each unit. These curtains help prevent extra heat from escaping during winter and keeps the warmth outside from heating up your building during summer. Opening blinds and shades on south-facing windows also allows for sunlight to heat up the space in winter.
Water
#8: Reduce Wasted Water
Aside from trimming down water usage, tamper-proof regulators by The Water Scrooge can also help you accomplish significant energy savings. On average, hot water comprises 65 percent of total water usage in households. By reducing the amount of water used, you save both water costs and the energy costs required to heat hot water.
Consider the Nelson Management Group. After months of using The Water Scrooge system, their 140-unit building annually saved $87,126 on water and $33,014 on energy at the same time.
Install low-flow aerators or flow regulators to reduce water usage inside units. While these flow regulators undoubtedly work, problems can arise when they are either tampered with or removed by tenants who are dissatisfied with their water flow. Proving ROI of these products is also a challenge.
A better approach to this problem is installing tamper-proof regulators and adapting a system that allows you to review your usage post-installation.
#9: Standardize Water Heater Temps
An average family of four takes a shower for 5 minutes each, using 700 gallons of water in a week. By setting water heater temperature consistently at 120 degrees, you save on water heating bills without sacrificing comfort. For high-risk buildings where most tenants have compromised immune systems (e.g., nursing homes), the American Society of Heating, Refrigerating, and Air-Conditioning Engineers recommends that water heaters be set at 140 degrees.
#10. Adjust Hot Tub and Pool Temps
During the summer months, set hot tub temperatures to 96 degrees and not more than 102 degrees during cooler months. Turn off pool heaters during summer.
#11. Be Proactive About Leaks and Drips
Leaks are no joke.
According to the Environmental Protection Agency (EPA), a showerhead leaking at 10 drips per minute wastes more than 500 gallons per year – around the same amount of water it takes to wash 60 full loads of dishes! Meanwhile, a leaky faucet dripping at one drop per second wastes enough water to take 180 showers if left unattended for a year.
There are various options for saving water and utilities in multi-unit buildings. However, it pays to consult with a team of professionals who have a proven track record of providing custom solutions to reduce water usage (and energy at the same time) through a creative problem-solving approach.
Besides limiting water usage, auditing units for undetectable water leaks is a sustainable choice. It's not uncommon for leaking toilets with worn out and leaking flappers to go unnoticed. Encourage tenants (perhaps with an incentive system) to look for and report leaky faucets, pipes, toilets, and showerheads to property managers.
An Ingenious Way to Water Savings
The Water Scrooge is a one-stop solution for checking multi-unit properties for leaks and installing tamper-proof water regulators.
Imagine yourself with a fever. You take acetaminophen to abate the symptoms, but what about the cause behind the symptoms? It could be a throat infection or a stomach bug. You need to find out the root cause ASAP and find a way to stop it, right?
This is what The Water Scrooge does for your water wastage problem.
The Water Scrooge team will do a thorough water leak survey of each unit and also audit the water meters for inaccuracy at the time the tamper-proof system is installed. Subsequently, we will review the meters and create a comprehensive report of the installation, the leak survey, and your projected savings three months later.
Our clients are delighted by the fact that our tamper-proof water regulators are installed inconspicuously. Most tenants do not notice any significant change to water flow. And if curious tenants eventually notice the regulators, there is no way for them to be removed because it takes a special set of tools to do so.
The Water Scrooge has been installed in over 40,000 units and counting. On average, our clients in the real estate industry have been reaping the following benefits:
- An annual average savings of $500 on each unit for water and hot water costs
- 25 percent reduction in hot water usage
- Positive ROI in six months after installation of The Water Scrooge system
The significant reduction in utility costs will increase your property's value. Plus, your tenants will be happy too!
Curious how much water waste is costing your building? Check out our savings calculator designed for multi-unit buildings in NYC and similar metro areas.
