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Are electricity suite meters worth the investment? Part 2

By Christopher Seepe

In Part 1 we reviewed the ins and outs of suite metering in multi-residential properties. Here in Part 2 we’ll review the business case;

So, despite the potential long tenant-turnover timeframe, here’s why you should still do it. From a return on investment and return of investment perspective, it could possibly be the best investment you’ll ever make in your property.

In my case, when I purchased the building, all eleven tenants had their electricity costs included in their rent.

The electricity bill was about $14,000 per year.

Once I had the go ahead from the utility company, I obtained six quotes for installation. Prices ranged from $10,000 to $28,000. I learned from several independent sources that I should be looking at about $1,000 to $1,100 per meter installed. This cost does not include the actual meter; only the wiring, back plates, wall mounts and other assorted infrastructure requirements. The utility company will install the actual meters. Every utility company has a different cost recovery policy. In my case, my utility company provided all the meters themselves for free (which it should) and charged me a one-time $50 fee for each installed meter above the first four (three apartments + the house meter). They also charge a one-time fee of $30 for each tenant that is transferred from your bill to the tenant’s own bill. The tenant would pay this service fee.

The business case (roughly speaking) …

  • Total invoice, including HST = $11,550 to install 11 suite meters plus a house meter (about $960/meter installed)
  • Average annual electricity bill = $14,000
  • Cost reduction strategic objective: convert 8 of 11 units (73%) within three years to having tenants pay their own electricity bills
  • Cost reduction financial objective: = $14,000 x 73% = $10,220
  • Multi-residential investment properties are currently selling at between a 5 and 6 capitalization rate (if you don’t know what this is, speak to your accountant. This topic requires a multi-page article of its own)
  • $10,220 / 5% (cap rate) = $204,400  or $10,220 / 6% (cap rate) = $170,330

I didn’t factor in/out the common area costs, just to keep the premise of the business case simple. The financial result is substantial any way you slice it.

Business Case Summary

There’s more to determining the total return on the value of the investment but, in the simple math above, adding between $170,000 and $204,000 to the value of your property for an investment of $14,000 should be a pretty obvious inducement if you have the upfront $14,000 to do it.

Energy Management

I now also have a very useful record of the energy consumption of every unit. I created a meter record sheet to record all the individual kilowatt-hours, and created a spreadsheet that not only tracks usage on a per unit basis but also automatically colour-codes every unit to instantly identify the heavy users relative to total consumption of the building.

The first table (below) in the spreadsheet records the meter readings in kilowatt-hours per apartment unit. Entries in blue are inputted manually. Everything else in black is computed or is static data (eg. text)

This next table computes the actual number of KwHrs used by each suite as a daily average. I read the meters whenever I visit the property. There is no prescribed schedule.

The next table calculates the percentage of consumption of each unit relative to all the units. Here, unit 202 is by far the heaviest energy consumer, which begs the obvious question … why? It might be legitimate. There may be two adults and two teenagers, two televisions, they eat at home a lot and like to heat their unit to a ‘toasty’ level. Alternatively, they might be using unapproved appliances like an in-suite clothes washer and dryer, or worse, they’re growing something they ought not to be growing.

This last table eliminates the tenants who pay their own electricity and analyzes the remaining tenants whose electricity is included in the rent. Unit 202 becomes even more singled out, consuming an average of 1/5th of all the energy of the “electricity-included” tenants.

The electrical room before the suite meter conversion. Each apartment has its own shutoff switch.

The electrical room with the suite meters installed. Shutoff switches are replaced by a locked central circuit panel.

Get a copy of the spreadsheet: Please write me and I would be happy to send you a copy of the spreadsheet that I developed to track electricity meter charges.

Christopher Seepe is a commercial realtor, and maintains, a website dedicated to providing expert advice and sharing his personal investment and ownership experiences to those investing, or looking to invest, in multi-unit residential, income generating properties in southern Ontario, Canada. You can contact him directly at

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One Response to “Are electricity suite meters worth the investment? Part 2”

  1. Dan Cosma says:


    I have read the article and I want to congratulate you for the clarity and accuracy of your case-study. I am involved in the monitoring/metering/billing and I am looking constantly support for my Customers , in order to underline the importance of sub-metering of energy.
    It is comprehensive , explanatory and eloquent.
    My congrats

    Eng Dan Cosma

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