Metering of electricity with secondary prepaid electricity meters is an excellent way for property investors, landlords and letting agents to avoid the risk of having to pay electricity utility bills, when tenants don't pay or one is faced with constant disputes on electricity bills.
However, feedback from the field shows that prepaid electricity meters also have other benefits. Customers who have installed prepaid electricity meters, in their rental units, are telling that one of the interesting benefits of using prepaid meters is that they are directly reducing their tenant turnover.
When landlords installed prepaid meters it was with the view of reducing risk. The meters achieved this. Then, with time, landlords found that the number of disputes over electricity bills was almost completely eliminated. With fewer disputes, our tenants have been more satisfied with services. Soon after, landlord started noting that more of our tenants were renewing their leases. Normally, in some areas most tenants would not renew.
Landlord are becoming convinced that the improvement relations has been brought about because of the prepaid electricity meters and, as a result, is one of the main reasons more tenants are renewing their leases. There was no other change to the properties other than the addition of the prepaid meters in certain areas, and all of the sudden the vacancy rates are dropping and so is the turnover of tenants each year.
Building a good tenant base is a key factor for real estate investors and letting agents alike. They want to keep good tenants for as long as they can. The more good tenants an investor or letting agent has and the longer they remain as tenants, the more profitable their buy-to-let or letting operation is.
Costs of advertising and vetting tenants are one of the main costs that chew into the profit made over the rental period. When a rental unit has a high tenant turnover, these costs must be frequently amortized over the period of each lease agreement. It stands to reason that if landlords and letting agents can reduce their tenant churn, that they will incur fewer marketing and vetting costs, and the overall profit from the rental lease will be increased.
Field research conducted shows that tenants residing in rental units fitted with a prepaid electricity meter, are generally happier with the financial arrangement of electricity bill. The main benefit reported by tenants is that, because of the meter, they are able to monitor exactly how much electricity they are consuming.
Tenants also point out that they like knowing how much they are spending as they are paying in advance and do not have to dread receiving a large electricity bill at the month end.
Author Resource:-
Sean Wheller is the founder of www.PrePaidMeters.co.za, a PrePaid Electricity Meters provider in South Africa, dedicated to create efficiency in metering electricity for the benefit of the tenants and landlords.
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