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Utility Passthrough Ratio Calculator

Utility passthrough transfers landlord utility cost to tenants.

$
%
%
%
%

Effective passthrough %

0.83%

Landlord $

$49,500

Tenant $

$250,500

How the math works

Passthrough = direct + submeter + 90% of RUBS (RUBS captures ~90% effective).

50% + 20% + 13.5% = 83.5% passthrough. Landlord: $300k × 16.5% = $49.5k.

How to Use

  1. Enter total utility spend.
  2. Enter % already tenant-paid.
  3. Enter % submetered.
  4. Enter % RUBS.
  5. Enter % landlord-absorbed.
  6. Read passthrough ratio.

Frequently Asked Questions

Passthrough methods?

(1) Direct metering: tenant pays utility directly, landlord has separate meter for common areas. Clean separation. (2) Submetering: each unit submeter, landlord bills tenant based on reading. Slight admin. (3) RUBS (Ratio Utility Billing): master meter, split by # of occupants, sqft, or formula. Less precise. (4) Landlord-absorbed: landlord pays, rent reflects.

State-by-state variation?

CA: Sub-metering common. Large property required. TX: RUBS + submetering widely used. NY: typically landlord-paid (older buildings, gas heat). Chicago: submetering common. Submetering requires PSC approval in some states (NY, NJ). RUBS: simpler regulatory process, but lower precision. Direct metering: ideal but requires building infrastructure.

Savings + economics?

Landlord-paid utilities: $1,000-3,000/unit/year. Submetering install: $350-650/unit. Payback 3-8 years as landlord eliminates utility cost AND tenant reduces consumption 10-25% (paying directly). RUBS installation: $50-150/unit (software setup). Payback <1 year. Direct metering (new construction): preferred; retrofit: expensive but best.

Tenant impact?

Transition from landlord-paid to tenant-paid: rent reduction 50-80% of utility cost, tenant now pays utility. Net-net: most tenants pay slightly less (conservation gains). Some heavy users pay more. Billing complexity: tenant receives separate bill from utility (direct meter) or from landlord (sub/RUBS). Complaint rate spikes: tenants not used to variable utility bills.

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