Top 10 Ways for Condo Associations To SLASH Expenses
What are the best ways for condo associations to SAVE money? Today more than ever condo associations all over the U.S. are looking for more and more ways to save money. So here are top 10 most effective ways for condo associations to save money:
- Hire a more effective condo management company. One of the biggest mistaken beliefs is that condo associations think they are saving money by hiring a low cost management company. It is most certainly the opposite and that is actually most likely costing the association thousands of dollars more. This is because low cost condo management companies can’t provide the level of attention and expertise on cost cutting measures and negotiation leverage that more effective value driven condo management companies can offer. In addition, low cost management companies are often making money through other means that may not be transparent to the association and board of directors.
- Reduce/eliminate association employees and convert to outside vendors. This is particularly applicable for smaller condo associations. There is really no really good reason why smaller associations (ie. under 100 units) need to have employees. There is a higher cost to having employees. Typically, these associations have an emotional connection to the employees as they are typically janitorial type employees. But if the association is truly looking to cut costs, then this is a very good way to do so.
- Convert lighting and light bulbs to more efficient technologies. For starters, convert all your standard incandescent bulbs to spiral/compact florescent bulbs. This is a sure way to save money. And if you want to take it a step further, start converting to LED lighting. For example, convert all EXIT type lighting that is on 24 hours a day to LED lighting. This will save a significant amount of money especially for larger sized buildings.
- Renegotiate service contracts. Go back to your waste removal company, your landscaping services company or your janitorial services company and negotiate better pricing. If you are a Chicago based condo association, you probably won’t want to bother negotiating down with your snow removal company based on this past winter’s snow fall.
- Insurance policy review. Some times insurance policies are too inclusive or no one has bothered to get competitive quotes. Insurance is typically one of the largest condo association expense and is one of the largest potential cost savings for a condo association.
- Curb legal expenses. It is very important to consult with law firms for certain issues. But there are times when getting a law firm involved in an issue is unnecessary. Additionally, if your condo association has collections cases, it is important to pursue those uncollected assessments but only when it makes sense. For example, getting a judge to award an order of possession to a condo association for a unit that needs $15,000 in repairs to make it rentable is probably not a wise legal expense.
- Invest in more efficient HVAC equipment. The efficiency of boilers and hot water tank systems has improved tremendously. In addition, there are more and more financial incentives offered by Natural Gas companies and Electric companies to further incentivize buyers to move forward to more efficient HVAC equipment.
- Consider replacement of windows. This is expensive but the potential savings of going from a single pane 50 year old window to a double pane modern window might make the investment a very good one.
- Stop making “Band-Aid” repairs. I can not tell you how much money some associations literally throw away by hiring unqualified contractors who make cheap repairs that don’t last. For example, there is no worse way to overspend money than to keep patching roofs that need full replacement. It never pays to make cheap repairs especially when it ends up costing more than a permanent high quality repair.
- Capital repairs and replacements. The biggest ways condo associations overspend is by far related to capital projects. These are the most expensive line items of ANY condo association and has the highest potential of going wrong or overspending significant amounts of money. This makes it even more important for condo associations to have the RIGHT condo management company that will work in the best interest of the condo association especially when it comes to large scale projects that cost significant amounts of money.
Whether you live in a self-managed condo association or you live in a professionally managed condo association, there are many ways to SAVE money. It takes having the right knowledge and the energy and effort to make it happen.
About the Author:
Salvatore J. Sciacca aka “Condoboss” is one of the nation’s leading experts in the community property management industry. He is also the President and Founder of Chicago Property Services, Chicago’s #1 community property management company specializing in management and operations of condos/townhomes/HOA’s of 100 units and under. Salvatore is also the founder of managmycommunity.com (MMC), which is a state-of-the-art online support portal for community associations.
With over 20 years of industry experience, Salvatore is recognized for his extensive knowledge of capital planning, preventative maintenance, cost-saving measures and community building techniques. He holds industry stature as a Certified Manager of Community Associations (CMCA), the designation of Association Management Specialist (AMS) and is fully licensed as a manager (License #: 261.001386) through the State of IL.
Salvatore’s contact information is: