38 Unit Building, Los Angeles
The subject property consists of 38 apartment units containing 51 toilets. A Sensor Industries Toilet Leak Detection System was installed on July 1, 2016. The cumulative water used by all 51 toilets was tracked and is represented by the Blue Line on the graph above. Along with a four minor leaking toilets, a fifth toilet was identified which was refilling in leak mode in excess of over 5 ½ hours per day. Sensor Industries has designated these gross leaking toilets as “Rogue” Toilets. The chronic leakage was caused by a maladjusted flush mechanism causing the chain to often become stuck under the relatively new flapper valve. On 7/21, this Rogue Toilet was repaired and the apartment complex water usage dropped, on average, 545 gallons per day. As can be seen on the chart, this one Rogue Toilet was using 40% of all the toilet water being used by the apartment complex.
Repairing this one toilet saved $300.00 per month as verified by the water bill. An annual $3,600 increase in NOI equates to a first year ROI of 78% on the capital investment required to install the Sensor Industries system for this apartment complex. Applying a 5% CAP Rate to the $3,600/year water cost savings equates to $72,000 in lost Net Worth if the apartment complex is either sold or refinanced with status quo operating expense.