Managing a condo association comes with many responsibilities, and it includes ensuring that the budget of the building is sufficient to cover upcoming expenses and inflation. To do this, it’s crucial to implement regular increases to condo fees.
In this article, we discuss condo fee increases and how they can help maintain the financial stability of your building.
The Need for a Condo Fee Increase
As a property manager and owner of Boston HOA Management, I often consult with condo associations on how to maintain the financial stability of their buildings.
One of the most important things that I advise every single association to do is to build in at least a minimum 3% increase in their condo fees every year.
You may be thinking that this is a lot to ask, but it is crucial for ensuring the long-term financial stability and maintenance of the building. Basic inflation alone in the United States averages between 3-4%, and it’s important to remember that the expenses on your budget will go up as well.
From insurance to electricity, the cost of running a building will increase over time. If you are not planning for these increases, you will end up running a deficit, and that’s never a good thing.
How to Increase Your Condo Fees
To hedge against inflation, it’s important to increase condo fees each year slowly. This way, the increase is more manageable for owners. They won’t feel the impact as much as they would if you waited three years and then had to increase fees by 15-20%.
Additionally, this approach makes it much easier to budget and pay bills. It also ensures that there is enough padding in the operating and reserve accounts to run the building properly.
It’s important to remember that this is a proactive approach that will ultimately benefit all of the owners in the building. It is much easier to make small increases to the budget each year rather than waiting and having to make a big jump later on.
The Boston HOA Guarantee
We’re here to help and ensure the long-term success of your building. If you or anyone you know needs help with budgeting, financials, or building management in general, please don’t hesitate to reach out to us at Boston HOA Management.
