Sell for More Trivia is a weekly blog series that playfully presents a trivia question about commercial real estate.
Hint: A RUBS is a creative way to pass property expenses onto tenants without raising the rent.
RUBS is an acronym for Ratio Utility Billing System. This system bills back a portion of the water, sewer, trash, electric, and gas expenses to the tenants.
Many landlords don’t pass utility expenses onto tenants because each space is not separately metered for each utility. For example, many commercial spaces are separately metered for gas and electricity – but not water or sewer. And including trash in the calculation is just good business.
Implementing a RUBS is also a great way to increase the value of your property. How? The more expenses the landlord can pass onto tenants…the lower the building expenses…the higher the property’s net operating income…the higher the value of the property. A RUBS will literally make many properties worth more.
You’ll see a RUBS used most often in multifamily properties.
A RUBS has several advantages:
- No capital investment to get started
- Enables owners to recoup a large portion of the overall utility expense
- Can be implemented quickly
- Immediately improves cash flow
A RUBS is also generally considered a lower cost, easier alternative than Submetering.
Estimate how much your property is worth, for free, before you list it for sale. Plus get the step-by-step blueprint to sell your property for the highest price the market will pay (click here)
How to get an unfair advantage. Click here to join Sell for More Club today.
Pop the champagne. Our clients celebrate when their sale closes…and we supply the champagne. Click here to schedule a no pressure call to get started.
About Beau Beach, CCIM
Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.
Beau leads Beachwood which is a commercial real estate broker for sellers in the Nashville, Milwaukee, South Florida and Chicago markets.
He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.
Beau can be reached at 800-721-3287, click to schedule a call or Beau@ProwessIRES.com