Who doesn't have a favorite toilet? Mine is this TOTO.
A good toilet may be one of the highest-return pieces of equipment in an apartment building.
Every operator can tell you three numbers cold: occupancy, delinquency and average rent.
Ask them how many gallons of water they use per unit per day, and most have no idea. They should.
Rents are flat. Insurance is always hard. Property taxes are up.
Revenue growth is hard to manufacture right now, and cutting expenses is easier. Water is one of the first places we look.
Savoy is built across the whole apartment business. Savoy Equity Partners develops and invests. Savoy Residential manages about 8,000 units. Savoy GC handles renovations and ground-up construction across Texas.
Inside Savoy GC, one team does nothing but plumbing systems and water conservation. So we can find the problem, scope the work, do the repairs and measure the result on one platform.
We do this on the properties we own, on the ones we manage, and for outside owners too.
The starting point is gallons per unit per day. Our target runs 130 to 160. Past 200, we start looking for problems.
We have diligenced properties burning more than 500 gallons per unit per day. At that level, the plumbing is failing all over the building.
Bringing it down takes a specialized crew, a property-wide checklist and the discipline to enter every unit.
The work starts with the toilets, where we repair or replace the tanks, flappers and flush valves that never stop running. Then the fixtures: low-flow showerheads and aerators residents will accept.
Then the silent leaks, the angle stops, shower manifolds, and supply lines that drip for years and never throw a work order. Last, the main lines, where underground leaks never reach the surface but keep the meter spinning.
On a 200-unit property, an eight-person crew can finish the unit-by-unit sweep in a matter of days. Underground leaks and main-line repairs need their own scope.
On the worst properties, we have cut total water use by more than half.
Now run the math on a 100-unit Dallas property where the owner pays the water bill.
Usage today is 300 gallons per unit per day, and the annual water bill is $120,500.
We invest $100,000 in a full conservation sweep and bring usage down to 160 gallons per unit per day. The new bill comes to about $64,250.
That is $56,250 saved in the first year on the money invested, a 56% return.
The NOI impact is where it gets interesting. At a 6% cap rate, $56,250 of stabilized annual savings supports about $937,500 of additional asset value.
That value comes from durable NOI a future buyer can underwrite.
$100,000 invested. $56,250 saved every year. Nearly $1 million of supported value.
This is what vertical integration should produce. The management company sees the operating problem, the construction company fixes it, and the ownership team knows what it does to NOI and value.
In a flat-rent market, this is how you manufacture appreciation.
Stop paying for water no one is using.
If you operate 100 or more units in Texas, DM me your unit count and your last 12 months of water bills. We will calculate your gallons per unit per day and tell you whether there is money hiding in the meter.