# Submetering vs RUBS: Cost, Fairness and Which to Pick

Source: https://submeter.com/submetering-vs-rubs/
Publisher: National Exemption Service (NES), https://submeter.com. Last reviewed September 2026.

On average, submetering recovers 85 to 95 percent of the bill and RUBS 70 to 85, with no meters. Compare cost, fairness, timing and where each is legal.

## What is the difference between submetering and RUBS?
Submetering measures exact utility consumption at each apartment with an individual meter, billing residents only for what they consume. Ratio Utility Billing Systems (RUBS) use no meters at all. Instead, RUBS divides the property's master utility bill among residents using an allocation formula based on factors such as unit square footage, bedroom count, or occupant totals. Submetering has an upfront install cost but typically recovers more of the bill (about 85 to 95 percent) and typically cuts water use 15 to 30 percent. RUBS has virtually no setup cost and starts immediately, but typically recovers 70 to 85 percent of utility costs.

This guide is for owners, property managers, and board members running communities of 80 units or more. Utility bills take a cut of your income every month, whether you manage garden apartments, condominiums, or a mobile home park. You will see how costs and recovery rates compare, what state laws require, and which setup fits your buildings.
## How submetering and RUBS work
Both programs pass utility costs from the property owner to the residents using the water, gas, or electricity. The two methods calculate bills in very different ways.
### How submetering works
With [submetering](https://submeter.com/what-is-submetering/), a technician installs a physical meter on the utility line feeding each individual apartment, downstream from the city master meter. Modern wireless submeters log and transmit usage data several times a day.
Residents receive a monthly bill for the exact gallons of water, kilowatt-hours of power, or therms of gas used inside their home. Common-area use stays with the owner, including irrigation, pools, clubhouses, and shared laundry rooms. The total amount billed to residents never exceeds the master-meter bill for the property.
Individual meters also help catch plumbing problems early. Through our MyReads portal, NES tracks daily continuous flow to catch running toilets or pipe leaks before bills spike. We cover these setups in our guide to [water, gas, and electric submetering](https://submeter.com/water-gas-electric-submetering/).
### How RUBS works
RUBS stands for ratio utility billing system ([what RUBS is](https://submeter.com/rubs-for-multifamily-real-estate/), in more detail). It requires no meters, no plumbing changes, and almost no setup cost.
RUBS splits the property's master utility bill with an administrative formula based on existing lease records. Common formula variables include:
- Number of occupants on the lease
- Unit square footage
- Bedroom and bathroom counts
- Fixture counts, such as sinks, toilets, and washing machines
When the master bill arrives, common-area deductions come off the top. The remaining total gets divided among occupied units by formula, so a two-bedroom unit with four occupants pays more than a one-bedroom home with one occupant. With [RUBS billing](https://submeter.com/rubs-billing/), recovery starts on your very next billing cycle.

## Submetering vs RUBS side by side
Choosing between RUBS or submetering comes down to your budget, building pipe layouts, and long-term recovery goals.
| Feature | Submetering | RUBS (Ratio Utility Billing) |
| --- | --- | --- |
| How charges are set | Actual measured usage at the unit meter | Mathematical formula (occupancy, sq ft, bedrooms) |
| Equipment required | Physical meters and wireless transmitters | None |
| Upfront cost | Averages $150 to $300 per unit | Virtually zero setup expense |
| Bill recovery rate | Typically 85 to 95 percent of master bill | Typically 70 to 85 percent of master bill |
| Water conservation | 15 to 30 percent reduction | Modest reduction; lower than submetering |
| Resident perception | High fairness; residents control their bill | Moderate fairness; residents question formulas |
| Implementation time | Few weeks to 90 days | About 30 days |
| Legal restrictions | Regulated by state, county, and municipal code | Banned or restricted in select states and cities |

## Is submetering more expensive than RUBS?
Submetering costs more than ratio billing on day one. Over several years, submetering brings back more money to the property.
Submetering installation averages $150 to $300 per unit. What it [costs on your property](https://submeter.com/how-much-does-submetering-cost/) depends on whether it is new construction or a retrofit, indoor or outdoor meters, and how many meters each unit needs. The biggest variable is access to each unit's line. If a water line is easy to reach, a meter goes in in under 30 minutes. If a water heater has to be moved out of a closet to reach the line, that unit costs noticeably more.
RUBS has almost no setup cost because no equipment goes on the walls. If cash is tight, RUBS avoids upfront spending.
Over time, two things decide [whether submetering saves money](https://submeter.com/does-submetering-save-money/) compared with RUBS:
- Higher utility recovery. RUBS usually recovers about 70 to 85 percent of the master utility bill. Submetering recovers about 85 to 95 percent. That gap of 10 to 15 percent adds up every month across 80 or 300 units.
- Lower water use. Once residents pay for their own water, water use typically drops 15 to 30 percent. Usage falls under RUBS too, but less, because one household's savings are shared with everyone else.
At one 337-unit community, NES added meters as leases renewed, so for a while both setups ran side by side. The 168 submetered units averaged 3,868 gallons per unit per month, 34% less than the 5,846 gallons used by the 169 units not yet metered. Their average bill was $54.22 a month against $84.72, 36% lower, or about $30 per unit. Across all 337 units, that gap is worth roughly $123,000 a year.
Most properties earn back the install cost in 12 to 18 months from the cost they recover, and some sooner. After that the recovery continues every year. You can test your own numbers with our [RUBS vs submetering calculator](https://submeter.com/rubs-vs-submetering-calculator/).
Not sure which method fits?. Send 12 months of bills and your unit count. We will tell you which method recovers more at your property, and whether RUBS is allowed there.

## When RUBS is the better choice
Submetering is not always practical. RUBS works best under specific conditions:
- Complex plumbing. Older buildings often have multiple vertical water risers running through a single apartment. If one unit needs three meters for the kitchen and two bathrooms, installation costs can outstrip the financial return.
- Tight budgets. If cash is tight for an install that averages $150 to $300 per unit, RUBS needs no equipment investment.
- Fast start dates. Equipment retrofits take a few weeks to about 90 days to survey and install. RUBS can go live in about 30 days, with recovery starting on the first billing cycle.
- Short ownership plans. An owner planning to sell soon may not hold the property long enough to clear a 12 to 18 month payback.

## When submetering is the better choice
When plumbing and budgets line up, submetering offers stronger long-term results:
- Direct plumbing access. Units with a single main cold-water line, such as an open run above a water heater or in an outside closet, allow meters to go in quickly.
- High city utility rates. When municipal water rates are steep, typically recovering 85 to 95 percent of the master bill brings back far more money than the 70 to 85 percent RUBS typically recovers.
- Fairness for residents. Residents tend to see submetering as fairer because they pay only for what they use. That cuts down on arguments with the leasing office over neighbors running laundry all day.
- Daily leak detection. Modern wireless meters report several times a day. NES flags continuous flow from a running toilet or leaking pipe before water causes costly damage.
- Long-term holds. If you plan to keep the property for years, the meters pay for themselves and the higher recovery keeps coming.

## Starting with RUBS and moving to submetering later
Starting with one method does not lock you into it forever. Some owners start with RUBS, which can be live in about 30 days, and plan meters for later.
While RUBS brings in money, you can plan for meter installation. NES offers financing for properties that qualify, so you do not have to pay the install cost out of pocket all at once. Once ready, an owner can move to submetering later on the same NES contract.
We run both programs in house, so the changeover is straightforward. Residents get notice first, water is shut off only briefly, and no one moves out during installation.

## Questions
**Is RUBS legal everywhere?**
No. RUBS is not allowed everywhere, and some states ban it for certain utilities. California does not allow RUBS for electric or gas. Other locations require registration or a certificate before billing starts. NES has an in-house compliance team that checks state, county, and city rules for your exact address to confirm what the law allows there.

**Which recovers more of the water bill?**
Submetering recovers more of the master bill. Properties with submeters typically recover 85 to 95 percent of their utility costs, while RUBS recovers about 70 to 85 percent. Submetering also typically lowers water use 15 to 30 percent once residents pay for their own consumption. That drop reduces the total bill from the city before costs are passed through.

**Do residents prefer submetering or RUBS?**
Residents tend to see submetering as fairer because they pay for what they use. With individual meters, residents control their own monthly charges at the tap. RUBS divides bills by a formula like occupant count or unit size. That calculation can lead to resident disputes when light water users feel they are paying for a neighbor with higher use.

**Can I use RUBS for some utilities and submetering for others?**
Yes. You can combine both methods on the same property. An owner might install submeters on water lines where plumbing access is easy, but split central boiler gas or trash by a RUBS formula. We manage both billing types together on one resident statement, keeping common-area utility costs with the property owner.

**How fast can each one start?**
RUBS can go live in about 30 days, starting recovery on the first billing cycle. Submetering usually takes from a few weeks to about 90 days to set up equipment and begin billing residents. That schedule includes surveying the plumbing, installing nonproprietary meters, setting up wireless transmitters, and sending initial resident notices.

**Can I switch from RUBS to submetering later?**
Yes. Some properties start with RUBS to recover costs quickly, then move to submetering. You can move from RUBS to submetering on the same NES contract. We handle installation, meter reading, and billing in house, which makes the change simple for your staff without requiring anyone to move out.