Densely populated high rise condominiums have always been budget conscious. With so many expenses, it’s not hard to overspend and exceed the annual budget.
But this year is different. Reducing costs or finding new ways to generate revenue isn’t just a goal, it’s a necessity for many large condo communities. Costs for services, materials, and energy have skyrocketed over the past few years, and there is no reason to believe they will go down anytime soon.
5 ways condominiums can save money
- Reduce administrative costs
- Hire companies that offer value
- Experiment with AI
- Improve energy efficiencies
- Consolidate subscriptions/services
Depending on where you live, your community may also be struggling with insurance fees, legal requirements, or labor shortages.
In order to avoid angering residents by issuing hefty special assessments or maintenance fee increases, boards and managers are doing what they can to offset the high cost of maintaining a condo.
If you’re searching for some inspiration, check out the ideas listed below.
1. Reduce administrative costs
Administrative costs are any expenses incurred to maintain day-to-day operations of the condominium. This includes things like:
- professional/management fees
- legal fees
- permits and taxes
- office rent
- office equipment and supplies
- accounting fees
- licenses
- bank or loan fees
- events
Depending on the type of community you manage, annual administrative costs can easily add up to $5,500 per unit, or $1.65 million for a 300-unit building.
While we are not suggesting getting rid of the management office or cutting back on events that foster community engagement, we would recommend looking at the ways condo management software can reduce certain admin costs.
Use software to reduce admin costs
One of the great things about condo management software like Condo Control is that the cost is fixed. The more you use it, the more available it is.
Software reduces paper usage
Admin work requires a lot of documentation. Whether it’s sending out a letter, collecting a form or making a copy of an invoice, condominiums go through thousands of pages of paper every year.
Paper, ink and postage costs add up quickly, but software can reduce these costs by 25% or more.
By using announcements to send emails, accounting software to document finances and online service requests and amenity bookings to fulfill resident needs, paper usage and associated costs can be minimized by a lot.
Online payments can be made through the software platform
If you want fewer late payments and faster payment processing procedures, give residents an opportunity to make payments online.
Not only will there be fewer checks to cash and fewer invoices/receipts to create manually, but residents really appreciate the convenience.
Software empowers owners to help themselves
High rise communities are leveraging the power of technology and automation because it has demonstrated that it can save them money while increasing efficiencies. Moreover, it can help to improve the resident experience, which ultimately means less problem-solving for management and the board (and perhaps fewer serious conflicts).
For example, residents can sign into their accounts using a mobile app in order to access governing documents to check a rule, or submit a request to book the party room.
They are empowered to do more for themselves at a time that is most convenient for them, and admins get more time to tackle other responsibilities.
2. Hire companies that offer value
Several condo managers and board have mentioned that they are closely reviewing contracts and doing more tendering.
Condominium corporations participate in a formal tendering process to acquire goods or services from third-party suppliers or contractors. It is a structured process that ensures transparency, fairness, and competition in the selection of contractors.
By tendering, condominium communities:
- obtain the best value for money
- have an easier time maintaining integrity in the selection process
- ensure that the supplier or contractor they choose meets their specific requirements and needs
While it takes time to properly tender a project, it is worth the work. You may find that your current service provider is willing to offer a more competitive package to maintain business relations. Or, this could be the right time to hire someone new.
Avoid letting contacts renew automatically without speaking to the company or individual service provider. You don’t want your building to be stuck paying a bigger fee for the same service if you can avoid it.
3. Experiment with AI
In addition to software, condo managers are trying out some AI tools to see what the benefits and drawbacks are. In most cases, simple AI will help reduce the time it takes to complete tasks, but more advanced applications can be used to improve energy usage and reduce costs.
Companies have already built AI assistants designed specifically for real estate and property management companies. Many will integrate with existing condo management software for a seamless user experience.
ChatGPT
ChatGPT and similar AI programs use natural language processing to create conversational dialogue. It can respond to questions or requests, and create written content. Machine learning algorithms enable ChatGPT to analyze large amounts of text data in seconds.
The programs are free and available to anyone. Some boards and managers are using ChatGPT to summarize meeting minutes or find a specific clause within the community’s governing documents. This is an affordable and simple way to employ AI.
Chatbots
Chatbots can be installed on a condominium’s website to answer basic questions from prospective buyers or residents.
Most people are at least vaguely familiar with this tool (it’s a little box that will pop up in the corner of a website page) and it can help reduce the number of questions brought to management.
Thisconcept can also be used for maintenance request submissions. Responses are created ahead of time and are triggered when a specific question or request is submitted.
In some cases, it might be as simple as informing the resident that they are responsible for making the repair that they are asking the condominium to complete.
Screening
Digital leasing assistants have been around for a while. These tools serve as a first point of contact for prospective tenants, answering questions via website chatbots, and in some cases, through phone calls. Some systems will even schedule viewing dates.
AI screening software can vet tenants (and contractors) based on criteria that management controls. While it isn’t perfect, vetting software can help your team spend less time finding the best candidates.
Analytical AI
Analytical AI uses existing data and can make recommendations to improve efficiencies and reduce costs.
Algorithms can interpret something like energy consumption patterns in the condo building and suggest
adjustments to optimize usage.
4. Improve energy efficiencies
Speaking of energy, utilities (water, sewer, and energy) can eat up to 25% of a condominium’s annual budget, reports FirstService Residential.
Utility costs are expected to continue rising because of global supply issues and aging power grid infrastructures. As such, high rises, especially those located in cold weather climates, will want to seriously look at strategies for improving energy efficiencies.
Switch to LED light bulbs
This is an easy option that every condominium should take advantage of. LED bulbs use at least 75% less energy than incandescent lighting, and last much longer than traditional lights. When you think about all of the lights in your condo’s garage, hallways, and lobby, you can see how the savings would add up.
Consider using motion-controlled sensors in the gym or party room to see additional savings.
Install cold water booster pumps
Booster pumps increase water pressure along the water line to recover lost pressure from water traveling through pipes in a plumbing system. This allows pumps to operate at lower speeds while still providing good water pressure to residents.
Booster pumps can save a high rise thousands of dollars, and the impact is noticeable immediately.
Cooling tower controls
Cooling tower fan controls optimize the operation of cooling tower systems, which are commonly used in large buildings for HVAC systems. Cooling tower controls can be integrated with building automation systems to create a comprehensive control platform.
Cooling tower controls help reduce energy consumption by adjusting fan speed, water flow rates, and other variables based on real-time demand. As a result, energy efficiency is improved.
5. Consolidate subscriptions and/or services
This final point may be applicable if your community is using multiple platforms or solutions to assist with day-to-day operations. Paying for separate communication, document storage and amenity booking software adds up.
Take some time to review more comprehensive condo management solutions so that you can eliminate a couple of bills.
Conclusion
Boards and managers that care for high rise condominiums are being extra careful about spending. Everything costs more when it comes to condo operations, so making changes, even small ones, can help your community maintain financial stability.
