Everyone needs water, gas, and electricity, and if you live in a multifamily unit or rent out a multifamily building, you might already have a multifamily utility company working for you. But are they doing a good job? A good multifamily utility company can be more valuable than gold, but to truly understand how to maximize one’s value, investors and landlords need to take a close look at every single angle worth considering. This guide breaks down everything you need to know to find the best provider for your multifamily property.
What is a multifamily utility company?
A multifamily utility company is a service provider that takes care of utilities, things like water, electricity, gas, trash, and internet, for apartment buildings or other large residential properties. Instead of each tenant dealing with separate utility accounts, the company manages everything on behalf of the property owner, which, in the case of multifamily, is usually a single landlord. They often buy utilities in bulk to get better rates, track individual unit usage with submeters, and handle billing directly with tenants so landlords don’t have to. Many also help implement energy-saving or eco-friendly upgrades. The end result is less hassle for property managers and more predictable costs for everyone involved.
Why choosing the right utility company matters
Choosing the right utility company for your multifamily property directly impacts both your operational expenses and tenant satisfaction. A reliable provider can secure better rates through bulk purchasing, reducing your overall costs. They also help minimize billing errors and tenant disputes by offering clear, accurate, submetered billing. They are also an important part of the tenant experience, so having a good utility company can keep those referrals and renewals rolling in. Some companies even offer sustainability programs, which lower environmental impact and attract eco-conscious tenants and unlock potential green tax credits.
Types of utility management services offered
There are several types of services offered by multifamily utility companies. Depending on your property’s size, tenant mix, and operational goals, you may need one or all of these services:
| Service type | Description |
|---|---|
| Submetering | Installing meters to track individual unit usage. |
| Energy procurement | Negotiating bulk energy rates for the whole property. |
| Sustainability consulting | Advising on solar, water-saving technologies, and green certifications. |
| Billing management | Generating individual bills for tenants, collecting payments, and resolving disputes. |
| Compliance reporting | Ensuring utility operations meet local/state requirements. |
Factors to evaluate when selecting a multifamily utility company
Experience with multifamily properties
Working with a company that understands multifamily dynamics — tenant turnover, shared infrastructure, and different billing models- is by far the most important factor when choosing a multifamily utility company. If they don’t know multifamily, how on earth are they supposed to manage it? Properties with a mix of long-term tenants and short-term guests (like Airbnb or VRBO units) need even more flexibility.
Technology and reporting tools
A modern utility provider should offer:
- An online portal for real-time monitoring.
- Monthly reports detailing property-wide and unit-specific usage.
- Exportable data for tax and cost segregation reporting.
Cost structure and fees
Understanding the cost structure of multifamily utility services is essential for budgeting and comparing providers. Below is a breakdown of common fee types and their typical price ranges:
| Fee type | Typical range |
|---|---|
| Setup fee | $500 – $5,000 (based on property size) |
| Monthly service fee | $3 – $10 per unit |
| Submeter installation | $200 – $500 per unit |
Customer support
For larger buildings, 24/7 support matters — especially if utility issues directly impact short-term guest stays. Some companies assign dedicated account managers for large properties, which can be a valuable perk.
Pros and cons of using a specialized multifamily utility company
Choosing a specialized multifamily utility company can bring significant advantages, especially for owners managing larger properties, short-term rentals, or portfolios listed on platforms like Airbnb and VRBO. However, poor utility management can create unnecessary costs and risks, whether through the wrong provider or lack of proper oversight. Below is a table highlighting the key pros and cons:
| Pros | Cons |
|---|---|
| Lower per-unit utility costs through bulk purchasing | Risk of overpaying if rates are not regularly renegotiated |
| Fewer tenant disputes thanks to accurate submetering | Billing disputes can still arise if systems are outdated or inaccurate |
| Simpler tax reporting with utility costs integrated into cost segregation documentation | Missed tax deductions if costs are improperly tracked |
| Green energy options that may qualify for tax credits | Non-compliance with local regulations could result in fines |
Comparing top multifamily utility companies
Selecting the right utility management company is crucial for multifamily property owners and managers. Below is a comparison of leading companies in the industry, highlighting their services, pricing models, technology features, and experience.
| Company Name | Services Offered | Pricing Model | Technology Features | Multifamily Experience |
|---|---|---|---|---|
| Conservice | Comprehensive utility management, billing services, submetering, sustainability solutions | Customized per client | Advanced data analytics, integration with property management systems | Over 20 years |
| RealPage Utility Management | Utility expense management, submetering, billing services, energy management | Customized per client | Real-time monitoring, investment-grade data reporting | Over 20 years |
| Zego Utility | Utility expense management, resident billing, invoice auditing, expense recovery | Customized per client | Automated workflows, integration with accounting software | Over 10 years |
| Yardi Energy Suite | Utility billing, expense management, energy management, submetering services | Customized per client | Integrated with Yardi Voyager, real-time data tracking | Over 30 years |
| Banyan Water | Water conservation, utility billing, submetering, sustainability consulting | Customized per client | Real-time water usage monitoring, leak detection | Over 10 years |
Step-by-step guide to selecting the right multifamily utility provider
So you are looking to hire a utility company for your multifamily unit, but don’t know where to get started? Here are some easy to follow step by step instructions that will put you on the right path to choosing a multifamily utility provider.
Step 1: Understand your property’s needs
Start by putting together a basic profile of your property, the who, what, when, where, and why. This helps clarify what kind of utility setup and service plan you’ll actually need. How many units are you managing? Is it a small triplex or a large apartment complex? Are you running long-term leases, or is it mostly short-term rentals like Airbnb or VRBO? Are the tenants conservative with their usage of utilities or do they pump the heat or aircon up to max when the weather fluctuates? It’s also important to know whether each unit already has its own meter for tracking usage, or if that would need to be installed. And if your building has solar panels or other green energy systems, you’ll want to factor that in, too, especially if you’re aiming to manage or expand those features efficiently.
Step 2: Request detailed quotes and service demos
Once you have your property details ready, the next step is to contact utility providers and request detailed quotes. Be sure to ask for an itemized breakdown of all costs, including monthly service fees per unit, any one-time setup fees, and equipment installation costs if submeters or other hardware are required. If the provider offers an online platform for monitoring usage and generating reports, ask for a demo to evaluate how user-friendly and comprehensive the system is. This is especially important for properties that require regular reporting for tax purposes or cost segregation studies.
Step 3: Review contracts carefully
Before you sign anything, go through the contract with a fine-tooth comb. Pay attention to:
- Any automatic price increases after the first year.
- Early termination penalties if you want to switch providers later.
- Clear definitions of which services are included and which are considered add-ons (like sustainability consulting or special reporting).
Step 4: Check references
Before making a final decision, take time to check references by speaking with other multifamily property owners who have worked with the utility provider. Ask about their experiences with billing accuracy, how well the provider handles tenant communication, and how responsive the support team is when issues arise. First-hand feedback from other owners can reveal potential red flags and help you understand what to expect once you sign on.
Step 5: Confirm tax reporting support
Choose a utility provider that does more than just send out bills. Look for one that offers monthly cost reports you can easily use for tax filing, and ideally, one that can also supply data that fits into your cost segregation study. This makes it easier to track utility expenses, improve deductions, and support more accurate depreciation schedules.
What about solar energy and multifamily? Should you be looking at a multifamily utitily company that provides that? The answer is YES, according to Robert Roth, the CEO and Founder of Quote for Solar.
Integrating solar energy into a multifamily property utility plan should start with assessing the building’s energy consumption, the roof or ground area available to install solar panels, and things like that. Ask yourself (and your team, partners, etc): what are my long-term goals, are there other things to prioritize, would this be a positive in the long-term, what does this do to my property value, etc. Basically, go over every single aspect of potentially adding solar energy to your complex.
Case study: 50-unit short-term rental building reduces utility costs
To show how a specialized multifamily utility company can make a measurable impact, consider this real-world example. A Florida-based investor owned a 50-unit short-term rental building catering to seasonal tourists through Airbnb and VRBO. Managing utilities for such a property came with challenges — fluctuating occupancy, inconsistent tenant usage, and billing disputes from guests unfamiliar with the property’s utility policies.
After switching to a multifamily utility company that offered bulk energy procurement and unit-level submetering, the property saw immediate improvements. Within just 6 months, the owner:
- Reduced total energy costs by 15% through bulk purchasing.
- Gained real-time visibility into unit-by-unit usage, which allowed faster dispute resolution and improved operational oversight.
- Received automated monthly reports, making it much easier to feed utility data into cost segregation studies for tax purposes.
Here’s how the monthly utility costs changed after the switch:
Tax benefits of accurate utility tracking
For owners of multifamily properties, especially those with multiple short-term rental units or seasonal tenant turnover, utility tracking isn’t just about paying bills, it’s an important tax strategy. Every dollar spent on utilities can either reduce taxable income or become part of a cost segregation study to accelerate depreciation.
Partnering with a specialized utility company helps landlords stay organized and tax-efficient. They make sure every utility expense is properly categorized for maximum write-offs and provide reports that align with cost segregation studies. If the property includes green upgrades like solar panels or efficient appliances, the utility data can also back up applications for energy-related tax credits.
Ready to rethink your multifamily utility strategy?
Choosing the right multifamily utility company is like choosing foster parents to manage your burgeoning family of multifamily rental units. It’s not just about saving a few bucks on the power bill, it’s a strategic decision that can improve profitability, simplify taxes, and even make tenants grin on a regular basis. .The top companies offer more than just service delivery; they help landlords lock in lower rates through bulk purchasing, install submeters to track each unit’s usage fairly, and generate reports that plug directly into cost segregation studies for better tax deductions. If the property includes short-term rentals or green energy upgrades, the right utility partner can also help unlock sustainability incentives and keep operating costs in check across the board.
Explore how Remote Cost Seg can help you combine smart utility management with advanced tax strategies to maximize profits. Contact us today to learn more.
FAQ
How much can I save with a multifamily utility company?
Savings depend on the size of your property, your location, and your previous utility setup. However, most properties see savings of 10% to 20% after switching from flat-rate building-wide billing to submetered or bulk purchasing contracts managed by a specialized utility company. For larger properties or those with outdated billing systems, the savings can be even greater.
Can utility companies help with green tax credits?
Yes, but only some providers offer sustainability consulting services. These companies go beyond basic billing and actively recommend green upgrades, like installing solar panels, low-flow water systems, or energy-efficient HVAC units. By tracking the impact of these upgrades, they help owners apply for federal, state, and local green tax credits. In many cases, these improvements also enhance the property’s value and appeal to eco-conscious renters.
