The Great Recession has required all boards and property managers to investigate new and progressive ways to ensure that their bottom line is covered. While this has always been the mission, the economic reality of recent years has inspired more of a push to find creative solutions—new revenue streams—for condos, co-ops, and homeowner associations alike.
There are numerous ways boards can increase revenue, including installing cell phone antennas and vending machines, or with advertising efforts such as billboards and other exterior signage. However, there are also numerous obstacles, regulations and concerns to be addressed before this potential revenue can be realized.
“I believe that boards and owners should seek additional revenue sources,” says Marc Garrison, president at Chicago-based Private Holding Group, LLC, a real estate management firm, “but they must balance that goal with the intent of the association as a residential dwelling. Many potential revenue sources are not attractive to owners who purchased in the association for residential purposes. Additional revenue sources are very attractive, but boards have a duty first to provide and maintain the residential value of the association and dwelling units without compromising them for that revenue.”
For small to mid-size buildings, navigating rising costs and stagnant revenue can be an overwhelming challenge. With capital improvement projects, emergency repairs and general maintenance costs increasing, often any revenue taken in simply offsets fee increases and assessments—it doesn't go into reserves or rainy-day accounts.
“Boards have to have a realistic understanding of expectations,” says Jim Stoller, president of The Building Group, which provides real estate and management services throughout Chicagoland. “Too often we see people running for a board like a typical politician, without knowing the budget or understanding costs such as water, electric, gas and insurance. People move to buildings with certain expectations and typically people will vote to maintain the service level they had when they moved into the building.”