Generating Income

Article today raises a good issue in these times of budget shortfalls. Anyone else have ideas to contribute:

chicagotribune.com
COMMUNITY LIVING
Income-generators for your association
By Pamela Dittmer McKuen

Special to the Tribune

January 16, 2009

As the economic recession continues, many community associations are struggling to pay their bills. Assessment income has been lost to foreclosures and bankruptcies when owners see their jobs disappear. At the same time, costs have gone up.

"Every association is looking for new ways to make money," said Tim Snowden, deputy director of property management for Heil Heil Smart & Golee in Evanston. "They can only raise assessments and fines so many times."

Snowden's got a few suggestions for increasing association revenue. One is the user fee, whereby residents are charged to use certain amenities or common spaces such as the pool, clubhouse or assigned parking spaces.

User fees are popular, partly because residents have greater control over whether they are subject to the fee—someone who doesn't use the pool doesn't have to pay for it, he said.

"Most condominiums charge move-in and move-out fees, because of the wear and tear on the buildings," he said. "I've also seen a short-term lease fee. Most associations want a minimum 12-month lease, but in this case, you can rent your unit for 30 days, but you pay an additional fee."

Some associations charge owners to register their cars, pets or bicycles, he said.

Another income-generator is renting out portions of the common elements, he said.

"In addition to any commercial units, I've seen associations lease storage lockers, parking spaces and roof decks," he said.

"Frequently, people are assigned a parking spot along with their condo," said Jean Pickering, president of Chicago-based Tektite Group, a Web site host for community associations. "If someone doesn't have a car, you could rent their parking space."

Many local businesses welcome the opportunity to advertise to residents, perhaps by hanging flyers in the elevator or posting a sign on the property.

An association Web site not only saves money by streamlining expensive and labor-intensive administrative tasks, it helps make money, said Pickering.

"After you have your Web site, you can sell advertising," she said. "You can sponsor money-raising events that require registration and collection of fees, like rummage sales and bake sales."

Digital media consultant Blagica Bottigliero of Chicago looks to the Internet to build community and cash. Blogs, social networking sites and other online tools can keep owners in touch with each other and the neighborhood, and alert them to deals and discounts. Her company, CondoPerks.com, is an online shopping site that kicks back a percentage of user purchases to registered associations.

But she's also a fan of low-tech newsletters for their readability and advertising potential.

"Some people still like paper," she said.

Now for caveats: Before initiating any money-making program or procedures, check your governing documents, said association attorney Scott Rosenlund of Fosco Fullett Rosenlund PC, in Arlington Heights.

You want to make sure you have the authority to charge fees or to deal with utility and cable television companies who want to put their equipment on your property or market their services to your owners, he said.

Snowden cautions associations not to become dependent on non-assessment income. The money isn't steady, and you could end up short when you need it.

"It's better to kick that money into reserves," he said.

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There's also the tax issues of non-assessment income, but as has been pointed out, we need to think "outside the box"

Joe