The rippling effects of the recent recession has required all boards and property managers to investigate progressive ways to ensure that their bottom line is covered. While the latter has always been the inherent goal, the existing tenuous economic climate has placed more emphasis on finding creative financial solutions via new revenue streams.
To this end, there are numerous ways boards can increase revenue including installing cell phone towers or cable/satellite services on the roof, putting in vending machines or storage lockers, or contracting with companies for advertising billboards and signage. However, there are also numerous obstacles, regulations and concerns to be addressed before potential revenue can be realized.
“The idea of creative revenue generation triggers the notion of a broader fiscal analysis,” says Attorney Kenneth Direktor, director of the Community Association Practice Group for the law offices of Becker & Poliakoff in West Palm Beach. “A board or managing agent must look at ways to create revenue that will place as little financial burden on the owners as possible.”
For small to mid-size buildings, the ability to traverse this often rugged topography can be taxing. With capital improvement projects, emergency repairs and general maintenance an ever increasing cost, often any revenue realized simply offsets fees and price spikes to residents. To be affective, a multi-tiered approach is required without losing perspective.
“The function of an association is not really to focus on external revenue sources,” says Ken Arnold, CEO of Miami-based Association Financial Services. “Its function is to maintain the facility, and the maintenance fees maintain the facility.” After due diligence is executed and standard board operations are addressed, then focus can be placed on investigating new revenue streams, notes Arnold.