Budgeting helps with anticipating costs
Budgeting is an annual task for housing cooperatives. Budjeting helps determine where the cooperative can afford to invest in the upcoming year. Since the income of a housing cooperative is generally stable, it is easy to calculate how much the maintenance fee covers and how much leeway or reserves the board has for covering unexpected expenses, so as to avoid collecting additional fees.
The older the property, the more surprises can arise during the year. How have you prepared for such situations? Especially with older properties, it is better to be step ahead and prepare for inevitable renovations in a timely manner.
When the housing cooperative’s budget is known, it also helps the shareholders plan their personal finances further ahead. When shareholders know the maintenance and unforeseen and unexpected expenses have been accounted for, there is no need for additional fees to be collected in the housing cooperative.
Project plan as a tool for budgeting
When a long-term property strategy is in place, budgeting for a housing cooperative becomes easier as necessary renovations have been planned in advance. It would be beneficial for a housing cooperative to have a property strategy in place for at least five years. This strategy provides a clear vision of how the property will be maintained, repaired, and developed within a specific timeframe.
Project planning is used to explore opportunities for renovations, additions, or new construction to increase the value of the property and improve living comfort. Transparent and well-planned renovation projects offer opportunities to enhance the value and comfort of individual apartments. Otherwise, renovation projects can become unexpected expenses borne by the shareholders of the housing company.
For example, many housing cooperatives could generate additional income by undertaking additional construction, which could partially or fully finance necessary renovations. Has your housing cooperative explored the possibilities of additional construction?
There are options for additional construction suitable for various budgets, such as vertical extensions or new construction on the existing plot. The ultimate goal is to finance the renovations. For instance, with vertical extensions, the new units are integrated into the existing building, resulting in reduced maintenance costs. The amount of the maintenance fee also decreases as more contributors join.
Are you interested in the possibilities of additional construction or planning renovations? Feel free to contact us, and we can find a suitable solution for you.
