Why do tenants demand electric sub meters?

Efficient management of electricity bills benefits not only the tenants but landlords too.


HMO Daddy Jim Haliburton’s number 1 money-saving tip for HMO landlords is to install electric sub meters – Jim finds this cut the electric bill on an HMO by half. This is the direct benet of managing electric effectively and I agree, but what about the indirect cost impacts that ineff¡cient processes are having on the property owner’s time?

Electric sub meters are good for landlords, even those who insist on admin intensive pre-pay options such as emptying coin meters or managing a petty cash tin used to sell pre-pay meter cards. The question that begs
asking is, are electric sub meters necessarily bad for tenants?

After collecting electric payments from residential and commercial tenants for more than 20 years as a landlord and running pre-pay electric businesses for almost 10 years, I think there can be no debate - electric sub meters are good for tenants!

1. Using an electric check-meter is like spending on credit.

Just like store cards that bring end-of-month surprises, post-pay electric meters tend to disconnect us from how what, why and where of electric usage. Who can remember all of what happened yesterday, let alone the heater being left on three weeks ago? When I tired of tenants telling me that post-pay meters were over-reading their usage I switched to pre-pay and the problem went away. With pre-pay the feedback is immediate – leave the heater on all day and you’ll need to either keep topping up or adjust your usage or accept that your choice is to use more electric and top-up in larger

2. Studies prove prepayment reduces usage by at least 1015% – wastage reduction that benefits everyone!

If electric is bundled into the rental, then the wastage costs the landlord and its upside all the way for the tenants, right? I don’t think it’s that simple. Landlords who don’t manage electric usage well will end up with lower-yielding properties. Even if they try to raise rentals to compensate, this tends to create more vacancies. These landlords will be at a competitive disadvantage. Tenants who are zealous in conserving energy tend to be rewarded with pre-pay but if the electric is bundled into the rental they are penalised by subsidising the wastrels.

3. Pre-pay gives tenants control

I was once called to a meeting where the landlord was subsidising the electric and charging a flat £15 per month – in his view, an unbelievable deal. He was at a loss as to why the tenants would want pre-pay. Their spokesman explained: “If my daughter needs school books this month, then I can manage my budget by using less electric if I’m on pre-pay, but with the current °at rate I lose this ability. Rather, subsidise the tariff you charge us, but give us the flexibility to manage our own usage and costs.” The owner installed an electric sub meter right after this meeting.

In summary, tenants value the transparency, certainty over costs and the control that electric sub meter brings them. I predict that tenants will increasingly vote with their feet, preferring those properties with prepay
over those without.

Click here for reviews from landlords or click here to buy an electric sub meter for landlords

Iain loves having conversations with landlords – he can be contacted at iainc@metroprepaid.co.uk

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