“Experience is a good teacher, but she sends in terrific bills.” Minna Antrim

With the ever increasing costs of utilities, many housing providers across the nation have turned to a system to have your tenants pay the utility costs based on their particular unit.

WHAT IS RUBS? The acronym stands for Ratio Utility Billing System. This is a system wherein a company does the billing for your units. It takes into account factors such as unit size, number of tenants and square footage of individual units. One reason many people think it is a cost saver is that we all have a tendency to not conserve when we are not at home. Examples used include motels and Air B&B’s where many of us leave the air conditioner on all day when we are out, because we are not paying the bill. Human nature causes people to be more conscious of the utility payment when we are the one paying. Whether it is fair and equitable is, of course, open to question. If you are a tenant in an apartment and are rarely home, you are going to feel entitled to a lower utility cost than the neighbor who rarely leaves. I have read that there is litigation in Santa Monica and San Diego regarding the fairness of these arrangements.

ALTERNATIVES. There are of course, alternatives to RUBS. You could install sub meters on your units, although this can be quite expensive. There are companies that do the installation and billing for you if you like. Remember that with any vendor, you are going to incur a fee and you will, most likely be required you to sign a contract. One more consideration is that if you sell the building, the new owner may not want this arrangement. The new owner might be concerned about cost or legal liability, so this change might be a negative.

WHAT TO DO My advice is to talk to a few companies in the business of sub metering or RUBS. You could have them give you bids for your building. It might be a good idea to talk to your real estate attorney regarding potential pitfalls. Lastly, I would talk to others who have used theses services, hopefully in your area. There is a potential to save money, but if it creates liabilities or alienates long term tenants, it may not be worth it. Information is always good, so check it out and you will be able to make an informed decision.

“If you want to be a hero, you’ve got to take hero shots.” Reggie Miller

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business or you may want to move into a more passive real estate investment, such as a triple net or a DSL.. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparable in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We are currently looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We can offer a 7 day escrow and all cash at closing. Give us a call. We have also put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.