Condos should look to cut costs

Mon, Feb 16, 2009 - my paper
Mr Raymond Ng

THIS recession might be a good time for condominium owners to review their expenditure on the maintenance of communal areas and come up with creative strategies to save money.

Big-ticket items like the appointment of a management company could cost up to $200,000 or more annually. Round-the-clock security services may cost another $200,000 or more for larger condominiums.

Expenses on lifts and other electrical and mechanical systems can also be high, and should be reviewed with the help of a qualified auditor where possible.

There are other cost components, such as the maintenance of swimming pools, tennis courts, saunas, gyms and playgrounds, which could also be reviewed based on their rates of utilisation, taking into account yearly expenditure on utility bills.

Condo owners could consider employing a property officer who is directly under their payroll instead of having to pay variousmiddlemen to procure different services.

In Australia, condos located along the Gold Coast make use of management rights to certify an owner-occupier to manage the communal area of the condo in which he is residing. If implemented prudently, this model could be a good strategy as the resident manager would have a greater stake in the estate versus an employee of a third-party company, and longer- term cost savings could also be a result.

Other strategies could include the increased use of security gadgets, re-routing of traffic flow, restricting visitors to parking near entrances and the training of a neighbourhood-watch team, which could rotate their duties with a neighbourhood police post.

Condo owners could also consider installing solar panels and other energy-saving devices to cut costs.

In short, every dollar spent should add value to the condominium. A well-managed condo with a healthy financial balance sheet will always have a better resale value than one which suffers from poor management and maintenance.

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