Many go shopping for a residential unit and naturally the complex, amenities and the actual unit are their most important considerations. Some, however, do compare monthly carrying charges as part of the evaluation, relying on what they are told are the monthly costs, but do little to understand what’s included, what the unique expenses of the property are, and how future capital needs will be funded. Then, there can be regret, when an additional assessment is imposed or the increase is well above other properties.
As our properties rely on the plunge in energy costs and the warmness of the weather the last couple years in the Northeast to offset other rising costs, knowing what’s going into your monthly charges, the risks you carry for others and the diligence of prior Boards to adequately fund for capital needs seem to come with that regret.
It’s straight forward that monthly charges should cover operating costs. But some properties have a large mortgage, others do not. Does a doorman meet you twenty-four/seven or only certain times? Was the property built with valuable commercial space or not? If so, who’s benefiting from those rising commercial rents, the owner of that unit, the developer or Sponsor or the unit owners? Are energy efficiencies a priority or does your property just incur the same old costs year after year. Amenities, naturally come with costs, so finding the right fit for your needs may seem to make a lot of sense.
We are not suggesting that you should become a gadfly about maximizing revenue or minimizing costs and nickel and diming is not for everyone. But by evaluating the aspects of the property that reflect reasonable extra charges, assuring that commercial lessees are paying all they are required, and a focus on timely unit owner charges can create new cash flow without an increase in monthly charges to unit owners. Long term capital needs must happen, and their funding needs must be considered constantly. A board taking the trouble to work into their agenda a community effort to discuss how to save money, whether that is something as simple as maintenance schedules to assure that the equipment runs efficiently, the seals chalked and the systems last as long as possible just plain seems to have lower annual increases than other properties. Remember, it is the Board that asks the most questions, and asks for the most, that tends to get the best service. Such service can help differentiate your property in many, many ways. Maybe it’s time to think about what goes into the monthly charges your property is paying.