On a master-metered property, the owner gets one water bill for the entire site and has no way of knowing which units used what. A resident running a leaky toilet for three months costs the same as one who is careful with every gallon, and the owner pays for both. Submetering changes that by putting a meter on each unit, so usage and cost can be tracked where they actually happen.
This guide covers the basics property owners and managers ask us about most: what submetering is, what it does for a property's finances, how a modern wireless system works, which installation scenario fits your site, and what the savings look like in a real apartment community.
What Is Submetering?
Submetering is the installation of meters downstream of a property's main utility meter. Each submeter measures the water or energy used by a specific unit, building, or component, giving the owner detailed consumption data that the master meter alone cannot provide.
The most common reason to submeter is billing. When the utility company has not metered each unit individually, submeters let the owner bill residents, tenants, or owners for their own consumption. Adding a utility cost recovery program on top of submetering has a direct impact on net operating income (NOI), the property's income after operating expenses. A higher NOI typically leads to a higher property value.
Why Property Owners Submeter Beyond Billing
Billing is the headline, but it is far from the only reason sites are turning to submetering. Other common uses include:
Capturing complete consumption data for utility rebate programs
Analyzing granular site data to find optimization opportunities
Providing leak detection to protect the property
Comparing water and energy use from one site to another across a portfolio
Submetering has become commonplace across the U.S. as more attention goes toward conserving water and energy, and the data it produces has become as valuable to owners as the billing itself.
Six Ways Submetering Pays Off for Property Owners
For small and mid-size property investors, the core advantage of submetering is lower utility costs. Accurately measuring and allocating usage to each resident reduces the utility expense the owner carries, and that one change sets off several others.
It Increases Cash Flow
Submetering lets owners recover utility expenses from the residents who used them. Money that used to leave the property every month as an absorbed expense stays on the books.
It Improves Cap Rates and Property Values
Lower utility expenses and higher cash flow raise NOI. Since commercial property values are commonly estimated by dividing NOI by a capitalization rate, every dollar of recovered utility cost raises the property's value in the eyes of a buyer or lender.
It Shields Owners From Rising Utility Rates
When residents pay for their own usage, rate increases from the utility no longer land entirely on the owner. Submetering insulates the property's budget from price swings it cannot control.
It Gives Residents a Reason to Conserve
Residents who see their own usage on their own bill tend to use less. Direct responsibility for consumption is one of the most effective conservation tools a property has.
It Helps Keep Rents Affordable
Lower overall utility expenses reduce the pressure to build those costs into base rent. Combined with the conservation incentive, submetering can help keep total housing costs more affordable for residents.
It Catches Leaks and Usage Spikes Early
Unit-level meters reveal leaks and unusual usage patterns that would stay buried in a master meter reading. Owners can address problems quickly and avoid costly water damage. Our guide to water leak detection for multifamily properties covers this in more depth.
How a Wireless Submetering System Works
Each submeter is paired with a radio frequency (RF) transceiver that sends the meter's reading and status back to a central data collection point. Because readings travel wirelessly, no one needs to enter units to read meters, and the property avoids the monthly cost of manual meter reading. We receive daily readings for more complete data and can drill down into interval data on individual meters when a closer look is needed.
| Component | What It Does | Power |
|---|---|---|
| Transceiver | Attaches to each meter and transmits its reading over RF | 3V lithium battery, replaced every 5 to 7 years |
| Repeater | Boosts transceiver signals back to the gateway, typically one for every 35 meters | Standard 110V power |
| Gateway | Main data collector that sends readings out over the site's internet (Ethernet or Wi-Fi) or a cellular connection | Standard 110V power |
The RF network is simple to install and maintain, and the whole system runs on standard power and long-life batteries. Our guide to automated meter reading explains the reading technology in more detail.
New Construction, Retrofit, or Conversion: Which Fits Your Property?
Every submetering project falls into one of three situations, and each comes with a different set of considerations.
| Scenario | Property Situation | Key Consideration |
|---|---|---|
| New construction | Submeters are called out during the planning phase of a new build | The easiest and most cost-effective time to install |
| Retrofit | The property is built and the owner decides to submeter individual units | More variables, so careful planning is essential |
| Conversion | Meters are already in place but the system is underperforming | Upgrading protects revenue and data quality |
New Construction Is the Ideal Time to Submeter
When submeters are part of the original plans, meter locations and the RF network can be drawn right into the building design. That brings several advantages:
Installation costs less because the needed contractors are already on site, and the work can be performed under existing building permits
The RF network is designed into the plans, which keeps installation simple
Meter locations are set in advance, avoiding messy retrofit workarounds later
Retrofits Take More Planning
In a retrofit, the property is already built and the owner has decided to submeter each unit. Many retrofits are straightforward. Others run into plumbing layouts that make installation cost-prohibitive, and in those cases an alternate bill-back program may be the better fit. Either way, a retrofit has more variables than new construction, so the planning phase matters. Meters designed for tight inside sets, like the Master Meter ReadMaster, can make retrofits practical in locations that once seemed too difficult to meter.
Conversions Fix Systems That Stopped Performing
A conversion applies when a site already has submeters, but the system is no longer performing at an acceptable level. Common reasons to upgrade include:
Lost revenue from older meters that have drifted out of accuracy
Too many estimated readings each month because meters are failing
The manufacturer has discontinued parts or support for the existing system
The property wants to move from manually read meters to automated wireless reading
Researching submetering usually means wading through technical jargon, countless meter technologies, and even more options for reading them. Our job is to sort through those choices with you and offer quality equipment at the best available price. For a closer look at the installation process itself, see our guide to water meter installation.
Does Submetering Save Water and Money?
Yes. In our experience, submetering typically reduces utility usage by 15% to 40%. Independent research points the same direction: the Building America Solution Center at Pacific Northwest National Laboratory cites a national study in which residents of submetered multifamily units used about 15% less water than residents of unmetered units.
We have measured utility savings in both condominium and apartment communities. In one apartment community, water submetering was phased in as residents renewed their leases or new residents moved in. The data below was captured when about half of the community was submetered, which created a side-by-side comparison within the same property.
| Unit Count | Total Consumption | Average Consumption | Average Bill | |
|---|---|---|---|---|
| Without submetering | 169 | 987,900 gal | 5,846 gal | $84.72 |
| With submetering | 168 | 649,800 gal | 3,868 gal | $54.22 |
Submetering residents in this community resulted in:
About 34% less water used per unit
About 2,000 gallons of water saved per unit
Average water bills 36% lower, a savings of about $30 per unit each month
Because both groups lived in the same community during the same period, the difference comes down to one factor: whether residents were paying for what they used.
Talk to Integrity Meter About Submetering Your Property
Integrity Meter plans, installs, and maintains submetering systems for apartment communities, condominiums, HOAs, commercial properties, and RV and mobile home parks. Learn more about our submeter installation services and submeter maintenance, browse meters and AMR equipment in our shop or the NextCentury lineup, and contact us to start planning the right system for your site.
Frequently Asked Questions
What is the difference between a master meter and a submeter?
A master meter is installed by the utility company and measures all the water or energy entering a property. A submeter is installed downstream of the master meter to measure usage for a specific unit, building, or component. Submeters let owners see and bill for individual consumption that the master meter lumps together.
How much does submetering reduce water use?
In our experience, submetering typically reduces utility usage by 15% to 40%, depending on the property. A national study cited by Pacific Northwest National Laboratory found that submetered multifamily residents used about 15% less water. In one apartment community we measured, submetered units averaged about 2,000 fewer gallons and $30 lower bills per month.
How does submetering increase property value?
Submetering lets owners recover utility costs from residents, which lowers operating expenses and raises net operating income. Commercial properties are commonly valued by dividing net operating income by a capitalization rate, so higher income from recovered utility costs translates directly into a higher estimated property value.
Can an existing apartment building be submetered?
Yes. Submetering an existing building is called a retrofit. Many retrofits are simple installations, but some plumbing layouts make them cost-prohibitive, and an alternate bill-back program may be a better fit. A site survey and careful planning up front determine which approach makes sense for the property.
How often do submeter transceiver batteries need to be replaced?
Transceivers in a wireless submetering system run on 3V lithium batteries that typically need replacing every 5 to 7 years. Repeaters and the gateway run on standard 110V power, so they do not rely on batteries. Replacement is quick and is a routine part of keeping the system reading accurately.