How Does Submetering Work?
Last reviewed September 2026NES Editorial, checked by the Billing & Compliance team
Submetering measures each unit's utility use under the property's master meter, then bills residents for what they actually consume.
How does submetering work?
Submetering works by placing an individual meter on each unit beneath the property's single master meter. The utility bills the property as a whole, and the submeters measure how much each unit uses. The owner, or a company like NES, then bills each resident for their own consumption. Modern submeters read wirelessly and report daily, so usage is accurate and leaks show up quickly. Common-area use is measured separately. The result is that residents pay for what they use, consumption drops, and the owner recovers cost instead of absorbing the master bill.
The four steps
- A submeter is installed on each unit, inside or outside
- Meters report usage to the billing platform several times a day
- Each resident is billed for their own measured use
- Common-area usage is measured and handled separately
What NES handles
NES installs the meters with in-house technicians, reads them daily, pays the master-meter bill, and bills your residents, then handles accounts receivable and resident questions with our own bilingual team.
Why the mechanics matter
Submetering has been in use since it was invented in the early 1920s, and the reason it persists is simple: it recovers operating expense. When residents pay for their own water, they conserve, and properties typically see 15 to 30 percent water savings. Daily reads also make submetering one of the best leak-detection tools available, since a running toilet shows up in the data within a day instead of on next month's master bill. Most properties earn back the cost in 12 to 18 months, and some sooner.
How it protects rent
In a master-metered building, rising utility rates eventually push rent up, because the owner has no other place to put the cost. Submetering separates the two. The utility cost follows usage to the resident who created it, so the owner can hold rent at market instead of raising it to cover the water bill. Common-area usage stays measurable on its own meter, so it is billed accurately rather than absorbed or spread across residents.
What can be submetered
All types of real estate can be submetered: apartment communities, mobile home parks, townhomes, and condominiums, new construction or existing. NES specializes in properties with 80 or more multifamily units and provides service in more than 43 states. Because regulations change frequently and vary by state and county, NES monitors the rules daily for every community it serves.
Related questions
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Thinking about submetering your property?
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