Managing the finances of a condo board can feel overwhelming, but it doesn’t have to be. By focusing on five critical KPIs, you can take control of your condo’s financial health and avoid costly surprises down the road.
Metric #1: Expenses vs. Revenue: Is our condo corporation overspending?
One of the clearest signs your condo board is heading toward financial trouble is when expenses outpace revenue. If your yearly budget is nearly exhausted halfway through the year, it’s time for an immediate course correction. For example, if your condo spends 80% of the budget by March, this signals a problem with cash flow management. Maintaining visibility on all expenses is essential. The faster you catch an imbalance, the quicker you can make adjustments, like cutting unnecessary costs or raising condo fees.
Condo Management Tip: Monthly reviews of your budget can help prevent year-end financial crises. Use easy-to-understand reports that track spending against revenue to stay on top of the numbers.
Metric #2: Average Arrears: Are unpaid condo fees piling up?
Unpaid condo fees can become a financial disaster if left unchecked. Arrears not only affect your current cash flow but also limit your ability to fund necessary repairs and services. As we discussed, it’s critical to keep up with collections. Small, manageable arrears can quickly turn into large deficits that hurt your ability to maintain the building and contribute to your reserve fund.
Condo Management Tip: Automate fee collection and communicate clearly about the consequences for non-payment. No one likes chasing owners for their fees.
Metric #3: Maintenance Response Time: Are repairs taking too long?
Delays in responding to maintenance requests can have a significant financial impact. What might start as a minor repair can quickly escalate into a costly issue if not addressed promptly. Slow responses lead to bigger, more expensive problems later on. Not only that, but residents may get frustrated, potentially withholding fees or even pursuing legal action.
Condo Management Tip: Implement a system to track and prioritize maintenance requests. Quick, efficient responses save money and keep residents happy.
Metric #4: Controlling Maintenance Costs: Are condo maintenance costs in check?
Maintenance costs can easily spiral out of control if you’re not keeping a close eye on them. This includes tracking labor, materials, and repairs. We keep these costs in check for our clients by conducting regular inspections and looking for ways to improve efficiency.
Condo Management Tip: Schedule proactive maintenance inspections to catch small problems before they turn into costly repairs. This approach reduces unexpected expenses and helps you stay within your budget.
Metric #5: Reserve Fund Contributions: Is our condo corporation prepared for the future?
Your reserve fund is the backbone of your condo’s long-term financial stability. It’s there to cover big-ticket repairs like roof replacements or elevator upgrades. Underfunding your reserve means future repairs could lead to emergency fee increases. You may need to adjust contributions based on your reserve fund study to ensure you’re prepared for upcoming expenses.
Condo Management Tip: Review your reserve fund study annually and adjust contributions as needed to avoid financial shocks in the future.
Condo boards that track these 5 financial metrics are better positioned to manage their finances and keep their buildings running smoothly.
Need help keeping your condo financials on track? Ask about partnering with us at Fort Management — we’re Fort McMurray’s local condo experts.
Sean brings a wealth of business management expertise and hands-on experience taking care of properties. In November 2023, Sean left an 18-year career with Syncrude in finance, logistics and leadership to lead Fort Management and the Hearn Group of Companies. Sean’s experience and credentials include being a long-term local real estate investor, Certified Condo Manager and Licensed Realtor. Sean and his family chose Fort McMurray as their home more than 20 years ago.