Submetering vs. RUBS: Which Should You Use?
· 6 min read
Submetering measures what each unit actually uses. RUBS estimates it from a formula. Both are legitimate ways to stop absorbing your tenants' utility costs, and the right answer usually comes down to what your building already has and what your state permits.
The practical difference
| Submetering | RUBS | |
|---|---|---|
| What it bills | Actual measured consumption | An estimated share of the master bill |
| Up-front cost | Meters, plumbing or electrical work, permits | None |
| Time to start | Weeks to months | Your next bill |
| Ongoing work | Read meters, maintain them | Update occupant counts when tenants change |
| Tenant perception | Hard to argue with a meter | Depends entirely on disclosure |
| Conservation effect | Strong and direct | Weak and indirect |
| Regulatory load | Often licensing, certification, accuracy standards | Disclosure, method limits, fee caps |
When submetering is worth it
Submeters pay for themselves when consumption varies a lot between units and the utility is expensive. Electricity and gas in a building where one unit runs a home office all day and another is empty during the week is the clearest case. Water in a building with a laundromat-scale user is another.
The arithmetic is straightforward: estimate the annual spread between what a heavy unit uses and what an even split would charge it, and compare that to installation cost amortised over the years you expect to hold the building. For a duplex with similar households, that number rarely justifies the plumber.
When RUBS is the better answer
Most small multifamily property. If your units are broadly similar, if the building was never plumbed for separate meters, and if the utility bill is a few hundred dollars a month, a formula that everybody understands and that is written into the lease recovers nearly as much for none of the capital cost.
RUBS is also reversible. If it turns out that occupant-based allocation is causing friction, you can change the method at the next lease renewal. A submeter is a permanent decision about a wall.
You can do both
Where the law pushes you one way
Several states effectively decide this for you. Massachusetts generally does not permit allocated billing to residential tenants at all — water may be billed only through certified submeters meeting specific conditions.
New York draws the line by utility rather than by building: electricity may be rebilled only through PSC-approved submetering, and ratio allocation of electricity is not permitted.
California regulates submetered water specifically, capping billing fees and limiting late fees, while several cities restrict pass-through billing entirely.
A reasonable default
Unless your state requires submeters or your units have genuinely lopsided consumption, start with RUBS. Disclose the method in the lease, keep the tenant shares adding to the bill exactly, and document every period you bill. If a particular unit turns out to be a consistent outlier, that is the moment to price a submeter for that unit specifically rather than rewiring the whole building.
Handles both, including the mixed case
SplitDue supports submetered units alongside unmetered ones: enter the meter reading, and only the remainder is split among the rest.
This article is general information, not legal advice. Submetering rules in particular vary sharply by state and utility. Confirm your local requirements before installing meters or billing tenants.