Are Utility companies charging you for a unit that is no longer occupied?
A term described to aid property owners in recovering costs associated with tenants who fail to transition their utility services in their name on or before moving in is called Vacant Cost Recovery (VCR).
As a property management team, we know there are concerns associated with collecting and paying the utility invoices for multiple locations. Added into that is the VCR that must make sure the customer is billed on the exact day the property is leased.
According to the National Apartment Association Survey of Operating Income and Expenses, utilities are among the top operating expenses for property managers. Of these expenses, 3-5% on average of utility bills for occupied apartments goes to owner for payment which means on several occasions, property owners end up footing the bill. On top of this, approximately 20-40 percent of new tenants don’t call ahead to arrange their utilities, which is commonly referred to as “vacant unit theft.”
The average recovery per invoice is $30, or around 50 cents per unit per month for a multi-family unit. When multiplied across hundreds of units, the total returns can really add up. Due to these shortfalls, property owners are spending thousands of dollars every year due to vacant unit theft.
If you don’t have the time or the staff to identify vacant unit cost recoveries, it may be wise to enlist help from a professional expense-management firm like RadiusPoint. As a Utility Expense Management provider, RadiusPoint will recover charges that have been mistakenly allocated toward your property’s bills. Our services don’t just stop there as we can help with a variety of billing concerns and energy saving practices:
- Invoice Receipt & Auditing
- On-Time Payments
- Resolution Disputes
- Reporting & Benchmarking
- Energy Supply Management
- And more!
In the end, auditing can save you up to 1.5 percent on average of your annual energy spend. Putting properties on the correct rate can save you as much as 1 percent to 2 percent per site and that is exactly what RadiusPoint will do for you. Our invoice audits, error identification and reconciliation produce a savings of over 25%, just imagine how much can be saved using vacant cost recovery.