Money MeterEase blog
How much can utility bill-backs recover on a 4-unit building?
If you own a fourplex with one water meter, you are probably paying the water, sewer and trash bill yourself. Billing it back can be a meaningful amount of money, but the honest answer to “how much?” is: it depends entirely on your bills. We are not going to quote an average. Instead, this post shows you how to estimate it for your own building, with example numbers that are clearly made up.
Every number below is an illustration, not data. Replace them with your own bills.
Step 1: Add up a year of bills
Seasonal swings matter, so use twelve months if you can. In our example, a 4-unit building has a combined water, sewer and trash bill that looks like this:
| Months | Example monthly bill | Months × bill |
|---|---|---|
| Jan–Apr | $380 | $1,520 |
| May–Aug | $520 | $2,080 |
| Sep–Dec | $420 | $1,680 |
| Year | $5,280 |
That is the gross amount you are currently absorbing: $5,280 a year, or $440 a month on average.
Step 2: Remove what you will not pass through
Most landlords do not bill tenants for late fees, and some keep fixed service charges. Say the example bill has a $25 monthly fixed charge you decide to keep:
$25 × 12 = $300, so the pass-through amount is $5,280 − $300 = $4,980.
If you plan to pass the whole bill through except late fees, skip this step.
Step 3: Account for vacancies
If your lease says the owner pays the vacant unit’s share (the most common choice), any month a unit is empty, you pay its share.
Example: each unit is an equal-sized two-bedroom, so each carries 25% of the bill. Suppose one unit sits empty for one month during the year, in a $520 month.
- The vacant unit’s share that month: 25% × ($520 − $25) = $123.75, which you pay.
- Recovered over the year: $4,980 − $123.75 = $4,856.25.
Your vacancy history is the right input here. If you rarely have a vacancy, this number is small. If you turn over units often, it is larger.
Step 4: Subtract the cost of doing it
Billing back is not free. Count:
- Your time. Gathering the bill, doing the math, sending statements and answering questions. Put a dollar value on it, even a rough one.
- Software, if you use it. For example, MeterEase Starter is $14 a month for one property with up to 4 units, or $168 a year. See pricing for current plans.
- Collection friction. Some months a tenant pays late, or questions a bill.
Using the software example: $4,856.25 − $168 = $4,688.25 net recovered in the example year.
Step 5: Think about rent
The number above is only the full picture if rent stays the same. Some landlords lower rent when they start bill-backs, to keep the tenant’s total monthly cost in a competitive range.
Example: if you lower rent by $40 per unit when you start billing back, that is $40 × 4 units × 12 months = $1,920 a year. The net effect in this example becomes $4,688.25 − $1,920 = $2,768.25.
Whether you adjust rent is a market decision for your area. The point is to compare total cost to tenants, rent plus utilities, before and after.
Step 6: Consider what changes after billing starts
Two things can shift the bill itself once tenants share the cost:
- Use may change. When tenants pay part of the bill, some may use less. We are not going to put a number on that, because it varies by building and we do not have reliable data for your situation. Treat any savings as a bonus, not part of your estimate.
- Leaks become visible faster. Tenants who see a share jump tend to report running toilets sooner. The U.S. EPA’s WaterSense program says a faucet dripping once per second can waste more than 3,000 gallons a year, so catching leaks early matters to everyone. See the EPA’s Fix a Leak Week page.
The summary formula
Annual recovery ≈ (yearly bill − amounts you keep) − vacant shares − cost of billing − any rent reduction
Our example, start to finish:
| Line | Example amount |
|---|---|
| Yearly bill | $5,280.00 |
| Fixed charges kept | −$300.00 |
| Vacant unit share | −$123.75 |
| Software (Starter example) | −$168.00 |
| Recovered, rent unchanged | $4,688.25 |
| Optional rent reduction | −$1,920.00 |
| Recovered, with rent reduction | $2,768.25 |
Again, these are made-up numbers to show the method. Your building may be higher or lower.
Before you start
- Check the rules. Some states regulate how landlords bill water back, and some limit it for certain property types. Texas rules, for example, only cover certain property sizes, and North Carolina limits formula-based water billing for apartment complexes. Start with our state guides. This is general information, not legal advice.
- Update the lease. You will need a clause naming the utilities, the method, and the vacancy rule. See how to add a RUBS clause to your lease.
- Tell tenants. Use our letter template.
- Run your numbers. The RUBS calculator shows the per-unit split for any bill, and our duplex and fourplex guide covers setups specific to smaller buildings.
Split the bill and email every tenant in minutes
MeterEase reads the master bill PDF, applies your method and vacancy rule, and emails each tenant their share with the math shown and the source bill attached, after you check the numbers. Plans start at $14/month.