It’s that time of the year again. Soon, you will need to inform your owners that their monthly fees are increasing, again. This is in spite of a close to zero inflation economy and owners’ salaries barely (or not) increasing. Despite this, every contract and vendor that the board hires, on owners’ behalf, automatically increases their fees every year. Vendor X may automatically increase its fee by 3% per year, while vendor Y increases its fee by 7%, and vendor Z increases it by 10%. This really adds up.
Boards all hear from their trusted advisors that they can’t do anything about costs because they are “fixed.” The city increased real estate taxes by ~10% & labor union contracts increased by ~2.8%. To top it all off, they can’t get alternative bids for insurance because the building has too many “problems.”
We worked with a building that hired a water-cost reduction consultant. This consultant told the board that their water costs were average; therefore they didn’t really recommend changing anything. The strange thing is that the water cost reduction consultant works on contingency. This particular board decided that average wasn’t good enough, so we helped them come up with alternatives.
When did average become good?
What if we told you that we have analyzed building costs for years, companies for decades, and can provide you with some concrete examples of various service costs? Among our hundreds of benchmark buildings, here’s a table with actual costs per unit with the following statistical measurements:
Selection of Vendors
Vendors Yearly Fee per Unit *
From the first service in the above table, why would you want to pay $1,531 per month per unit if you could pay $647 for the same service, or even $274? If you want to compare these numbers to your own building, just take the numbers times the number of units in your building.
Unsure of how this can help you save money? Give us a call!