Is It Worth Installing Prepaid Meters?

A real life example citing costs and collections
After 5 years of use here is a case study around ROI from prepaid meters
Get the essential prepaid meter bundle for your flatlet
4 Reasons why a Prepaid Electricity Meter is your FIRST choice

Many homeowners are renting out their flatlets or portions of their home to paying tenants, The number of landlords offering rentals including electricity and water seems to be dwindling as the harsh reality of just how expensive water and electricity is hits home.

Basically there are two solutions:

Install prepaid electricity and water meters and just watch the money hit your bank account on the 7th of each month OR
Install manual electricity and water meters then read them every month, then post invoices, then (hopefully) collect the money.

If you have a situation where you need to install both a prepaid electricity and prepaid water meter then the Flatlet Bundle from Straton Prepaid is a good buy.

BUT

Lets take a look at a practical example of collections from one of our clients:

In September 2020 we installed one prepaid water meter and one prepaid electricity meter for this client. Cost – around R5 800.00

Two years later in October 2022 we installed another prepaid water and prepaid electricity meter for an extended area. Cost – around R6 200.00

Since 2020 the client has replaced one prepaid water meter keypad – cost R895.00 (local client – no shipping)

Since September 2020 the client has recovered R164 964.00 in electricity and water costs from the various tenants.

Of that R164 964.00 – R51 262.00 was for water and R113 702.00 was for electricity.

A quick set of sums will show if the purchases were a good investment or not (Assuming that the landlord would have ‘absorbed’ the costs of water and electricity should the meters not have been installed).

Total Collected/Re-imbursed: R164 964.00
Less: R12 895.00 (equipment)
Nett Collections: R152 069.00

Please Note: The above collections would be used to pay the municipality so it is not a profit – rather a fairer way of providing electricity and water in a controlled environment where the landlord is not out of pocket should a tenant abuse any free allocation.

So one needs to look realistically at this and view prepaid meters as a device to assist tenants and landlords use a scarce resource. Bear in mind too that essential services have the potential to cause great conflict between the parties should queries arise. I have been there with a tenant who every month questioned my manual readings of an electricity meter but happily paid the extra admin fees from a prepaid electricity meter.

In the above scenario the landlord opted to pass on the administration costs to the tenants – these include a potential three sets of payment processing fees, monthly admin report and support.

Surely the meters will need to be replaced at some time I hear you ask!

In the over 15 years that we have been supplying and installing prepaid meters we can honestly say that the meters needing the most ‘attention’ are prepaid water meters – we have replaced a few before 5 years of use and do a roaring trade in replacement prepaid water meter keypads with replaceable batteries.

I can recall one electricity meter that we had to replace when we were doing the first install and can say that the prepaid electricity meters that we have installed have all been rock steady reliable.

If you are on the fence around prepaid meters then my best advice is to install a prepaid electricity meter first.

Why?

Cheaper to install
Tamper protected
You will collect the MOST money from electricity as opposed to water.
Electricity represents around 60% of your municipal bill for services – if you are in a water stressed area.