Benefits of Submetering for Owners and Residents
Last reviewed October 2026Reviewed by Grant Forehand, Compliance Officer, 20 years with NES
Owners recover utility costs and catch leaks within a day. Residents pay only for what they use. See the benefits of submetering, with real NES numbers.
What are the benefits of submetering?
Submetering measures utility use in each unit, shifting water costs from the owner to residents. For owners, the main benefits are recovering utility costs the property used to absorb, lowering water use (typically 15 to 30 percent), and catching leaks within a day. Master utility bills shrink, and budgets stay steady. For residents, submetering means paying only for their own water rather than splitting a bill with neighbors. A careful household pays less. Most properties earn back the installation cost within 12 to 18 months from the costs they recover.
This guide is for owners, property managers, and board members with communities of 80 or more units. When a property pays the city water bill itself, rising utility rates eat straight into operating income. Here you will see how submetering works, how much cost you can recover, how residents respond, and how to tell if your plumbing qualifies.
The short answer on why properties submeter
When a multifamily property runs on a single master meter, the city sends one water and sewer bill directly to ownership. The owner pays that bill out of rent revenue. Residents have no reason to turn off the tap, fix a dripping faucet, or report a running toilet in a bathroom closet. Every extra gallon costs the resident nothing.
Installing private meters behind the city meter changes that setup. This is what submetering is, and it tracks each apartment, condo, or mobile home lot on its own line. The city still bills the owner for the master meter. Wireless meters track unit usage so each household receives a monthly bill based on actual gallons. Resident payments reimburse the property for what was used.
Two things change right away: water use drops and the cost comes back to the property. (Our water submetering guide covers the mechanics.) The total billed to residents never exceeds the master-meter cost from the utility. Common-area use for laundry, irrigation, the pool, and the clubhouse stays with the owner. Separating resident use from common use keeps budgets steady when city water rates climb.
Benefits of submetering for property owners
Most of what an owner gets from submetering shows up on the monthly operating statement.
- Direct utility cost recovery. The main reason owners submeter is to stop absorbing water and sewer expenses. Shifting water charges to resident accounts recovers costs the property used to pay out of pocket.
- Lower water use. When residents pay for their own water, water use typically drops 15 to 30 percent. People turn off faucets while brushing teeth, run full dishwasher loads, and fix small leaks quickly.
- Fast leak detection. Modern wireless meters report several times a day. Through MyReads leak detection, continuous flow gets flagged within a day instead of waiting for the monthly city bill to arrive.
- Steadier budgets. Municipal water rates rise often. When the property absorbs those increases, operating margins shrink. Submetering keeps budgets steady because rate increases pass through to the end user.
- Protection for base rents. Properties that bundle water into rent often raise rents just to keep up with municipal utility increases. When water is billed separately, rents do not have to carry rising utility costs.
- Fewer disputes over fairness. Under flat splits, residents with low usage complain about paying for neighbors who run laundry all day. Meters cut down on those complaints because each household pays for its own use.
Recovering utility costs improves net operating income. You can check whether submetering saves money to see how these savings build up over years of ownership.
Benefits of submetering for tenants
Residents are sometimes wary when a property announces utility billing, but submetering is the fairest system for renters. The advantages center on personal control, fairness, and transparency.
- Fairness based on actual use. In an unmetered building, a resident who travels for work subsidizes a four-person household next door. Submetering ends this shared burden. Each home pays only for water that passes through its own meter line.
- Direct control over monthly costs. When utilities are wrapped into rent, conserving water saves the resident nothing. Under a metered system, taking shorter showers and running full laundry loads lowers the monthly bill.
- No common-area charges. Submetering protects residents from property overhead. Water used for irrigation, pool maintenance, or the leasing office stays with ownership and is never billed to residents.
- Early notice of plumbing leaks. A running toilet from a worn flapper can waste 200 or more gallons a day without making noise. Daily meter tracking catches continuous flow within a day, protecting residents from a surprise bill.
- Clear statements and direct support. Statements show the previous read, the current read, and the gallons used. When residents have questions, they call an in-house bilingual customer service team instead of the on-site leasing office.
Worked financial examples and real-world results
Numbers show how submetering changes property expenses.
Consider a 200-unit property with a $10,000 monthly water bill. After submetering, residents typically cut use 15 to 30 percent, so the master bill itself shrinks, and the rest is billed back to the residents who used it, never more than the master-meter cost.
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. You can review verified projects in our case studies or calculate estimates for your property with our ROI calculator.
Benefits for the community and local water supply
Submetering also conserves municipal water supplies. Pumping, treating, and heating water takes community energy.
When a large property cuts water use by a typical 15 to 30 percent, less water is pulled from local supplies each year. Finding running toilets and pipe leaks stops clean water from flowing unused into sewer lines. Properties that meter their units waste less water and put less strain on city treatment plants during dry months.
Operational trade-offs to consider
Submetering brings practical trade-offs that owners need to evaluate. You can review common challenges in our guide to submetering disadvantages.
Upfront equipment and labor require funding. Submetering installation averages $150 to $300 per unit. The price changes with how many meters each unit needs, meter type, indoor or outdoor meters, and new construction or retrofit. The biggest variable is access to each unit line. When a line is easy to reach, a meter goes in in under 30 minutes. If a water heater has to be moved to reach the line, that unit costs noticeably more.
Billing rules also vary by location. Some states require registration or a certificate before billing can begin. For example, properties must register with the Public Utility Commission of Texas, or obtain a certificate from the North Carolina Utilities Commission. Rates cannot be made up. They must match state, county, and city utility rules.
None of this is a dealbreaker. NES installs nonproprietary meters that you own, backed by a warranty, so you are never locked in to us. We offer financing for properties that qualify, so upfront costs do not have to come out of pocket all at once. Our in-house compliance team checks the rules for your property address before quoting, and our president serves on the board of the Utility Management and Conservation Association.
How to determine if submetering fits your property
Plumbing layout and property size determine the best billing setup. NES focuses on communities of 80 or more units, including apartments, condominiums, HOAs, townhomes, student housing, and mobile home parks. Smaller buildings are often better served by a small-property provider. Some older properties have split plumbing lines, where one line feeds the kitchen and another feeds the bathroom, which requires two meters per home.
When individual meters do not fit the plumbing, a ratio utility billing system (RUBS) offers another option. RUBS splits the master bill using a formula like occupant count or square footage. It needs no equipment, and recovery starts with the first billing cycle.
RUBS is not allowed everywhere, and it does not lower water use as much as physical meters. NES offers both programs and recommends what fits your buildings. Once a project begins, equipment and resident billing are usually live within a few weeks to about 90 days. You can review equipment pricing in our guide to submetering cost.
Related questions
Get submetering and compliance updates
A short email when we publish new guides or a state changes its billing rules. No sales sequences, and you can unsubscribe any time.
We handle your email as described in our privacy policy.
Request a utility recovery estimate for your property
Send NES 12 months of master-meter utility bills and your unit count. A specialist will reply within one business day, and our team will deliver a complete recovery model within five business days at no charge. Call (800) 572-7060 to review your property.