Greater Financial Health - Tips For Your New York City Condo or Co-op Finance
Maintaining your New York City condominium or cooperative’s financial health—just like maintaining your personal health—boils down to moderation and sharp decision making. Indulging every once in a while with sinful foods isn’t going to lead to a large-scale problem. However, eating donuts and hotdogs and cupcakes every day will likely yield detrimental results. In the same way, consistently making poor financial decisions will ruin the financial health of your condo or co-op.
To maintain maximum financial health for your multifamily property, consider these four “financial fitness” tips:
1. Delegate and separate financial duties.
Distinguishing responsibilities for receipts and responsibilities for deposits as separate tasks can help prevent financial mishandling. A knowledgeable property management company will possess the “know-how” to guide you on delegating these tasks to the appropriate board members and assist in successfully segregating these duties.
2. Obtain the right insurance coverage.
Your property should have a variety of insurance coverage. This includes
• Casualty insurance to protect common areas
• Liability insurance in case of legal action
• Excess or umbrella coverage
• Coverage to protect directors and officers from personal liability while they are fulfilling their association duties
• Fidelity insurance in case of theft
If you’re unsure of the types of coverage maintained by your property, consult your property manager. A resourceful management company will be able to provide you with the expert knowledge you need to proceed confidently.
3. Make sound investments.
When it comes to your reserve fund, focus on balancing liquidity with safety. CDs are a safe bet for your condominium or cooperative’s investments. Avoid stocks, municipal bonds and corporate bonds since they pose too much risk. Check your governing documents, or have a conversation with your management company, to make sure you are following all legal regulations.
4. Conduct audits on a regular basis.
A Certified Public Accountant should do an in-depth analysis of your property’s financial records and documents regularly, usually on an annual basis. Dependent upon the size of your condominium or cooperative, you may wish to discuss with your property manager the various review methods available (i.e. if your property would prefer or benefit from a less expensive and less in-depth review).
The above guidelines provide a starting point for you as your property moves towards a path of greater financial strength. However, partnering with an experienced property management company can go a long way in keeping you on the right track for your short- and long-term financial health. Find out how by contacting FirstService Residential, New York’s leading property management company.