The value of energy management is often measured in its impact on expenses – how much money are you spending on gas and electric supply, what is the price of your boiler replacement, how much will a solar installation save you in the long run? But for multifamily real estate owners, the value of energy management reaches well beyond the expense side of your P&L into topline revenue.
Keeping occupancy and rents high is one of your core business objectives. But all it takes is one energy-related snafu to send residents running. Energy management – the least talked about, most important secret to tenant retention.
Below are some of the most common energy-related frustrations that can cause a good resident to utter those feared four words – “It’s time to move”. Don’t worry, we’ve also included tips for avoiding these sticky situations.
Surprise Costs
While most residents choose an apartment based upon the base rent, they can get shocked (and steamed) when they start receiving their energy and water bills. Residents may not fully appreciate energy-efficient appliances on the day they move in, but the real cost of inefficient ones shows up in their utility bills and reduces the chance that they will renew their leases.
Ratio Utility Billing Systems (“RUBS”), may seem like an attractive option for owners who wish to bill residents for utility usage without the costs of submetering. However, when residents are paying a small percentage of the whole property’s usage, their individual actions have a nominal impact on how much they pay. This means that it is incumbent upon you as the owner to implement energy and water efficiency improvements property-wide or face the ire of residents when renewal time comes around.
Pro Tip: Install energy efficient appliances, clearly communicate billing procedures with residents, consider energy procurement options to increase control and stability over utility prices.
Temperature Chaos
Even renters want to feel like they own their spaces. A big part of that is having their apartments at temperatures that are comfortable for them. But that is often not the case. The building systems that directly impact resident comfort – heating, cooling, ventilation – are often dependent upon ownership’s energy management strategy. There’s not much a resident can do when the apartment feels tropical in December because of an imbalanced steam system. So they open the windows, for awhile. Some people accept and deal with the energy blunders, but many don’t.
Pro Tip: Schedule an energy audit, followed by retro-commissioning, to make sure systems are properly balanced and functioning optimally. This involves a lot more than just tuning the boiler or changing an air conditioner filter – the whole system needs to be checked and tuned to ensure that it can deliver consistent comfort.
Pressure Problems
For many people, that nice hot shower in the morning really sets the tone for the day… unless of course the hot water never comes on, the temperature swings wildly between hot and cold, or the pressure makes it feel more like a sprinkle than a shower. For the resident, the worst part is that there’s nothing they can do. As an owner or operator, you have the power to bring in an expert to solve what can be a thorny problem with a number of different possible causes. But you should do it before it’s too late and your tenants are already out the door for the last time.
Pro Tip: There are a lot of things that go into delivering a nice hot shower, including the boiler itself, the recirculation pump, the tempering valve, the showerhead, the water booster pump and the pipe condition and configuration. You’ll need an expert to analyze the system, diagnose the problem and propose a solution.
It’s tough to trace anyone move-out to an energy or water management problem but when it comes to multifamily, it’s clear that comfort is paramount and energy and water are directly related to some of the most notorious comfort issues. The good news is that these are solvable problems if you bring in an expert who knows what to look for. Just by acknowledging them, you’ll show your residents that their comfort and quality of life is important to you. Let the renewals begin!