December 2021
Have you ever looked at another condo building and wondered how they can afford what they have? Their building, and residents, appear to be in the same financial bracket as yours, yet things look so much better over there. They have modern amenities, an updated lobby and systems never seem to break down. They offer social activities each week and periodically undertake renovations to ensure spaces are popular and extensively used.
There may be envy mixed with some curiosity about how they can afford all this. What are they doing better than my building?
When it comes to individuals appearing wealthier than others despite any evidence of higher income, there may be hidden wealth or debt. On a personal level those “wealthier” individuals may have a nicer car, take more expensive vacations, undertake major home renovations and spend more lavishly. Eventually this all collapses when living on debt. Using up their credit card limits and extending lines of credit comes at a high cost.
The situation may appear similar when it comes to “wealthier” condo corporations but reasons differ. Condominium corporations that appear wealthy do so because of better and long-term planning. While those residing in that other building may be wealthier and pay more in condo fees, this is unlikely. A more reasonable explanation is that they have a more effective condo board, do a better job at budgeting and establishing a sustainable level of condo fees, and plan for the future. This provides them with the necessary funds to make their home nicer, more comfortable and properly functioning.
As individuals must live with and pay for their choices so must condominium corporations. Most individuals are in a similar position struggling to pay their accommodation, education and living costs. Each must decide how to spend what they have, how to finance what they can’t afford, and how to repay what they have financed. Each decides how much to set aside in their RRSP, TFSA and other investment vehicles for future use. These same issues apply to condo corporations.
Some make better choices than others.
