Condo common areas are updated for many reasons. Some may desire a more modern space. Others may feel a space is outdated, old or underutilized. Changing interests, demographics and building codes may warrant modifications. Then there are those who oppose spending of any money and risking higher condo fees.
Condo boards have a more singular agenda. They have a fiduciary duty to act in the interest of all condo owners and make decisions to protect their investments. For this reason redesign and redecorating should be fully considered before decisions are made. There are times when a more frugal approach is more appropriate. Other times it makes sense to invest.
One approach is to employ a professional interior designer to renovate or provide expert advice and guidance on how to improve an area. When evaluating recommendations focus on factors most important to your owners such as value and increased use of amenities. Andrea McMullen, Owner and lead Interior Designer at ADM Design Inc., offers the following advice. “When evaluating costs consider these on a per unit basis. While $400,000 may sound like a lot of money, $4,000 per unit (assuming 100 units) is a small investment that will directly boost individual unit values, increasing equity and resale values.” McMullen continues, “Condos need a designer to update the main structural elements (flooring, water features, elevator feature walls, etc.) anywhere from seven to 15 years depending on the health of each reserve fund, and a refresh every five to seven years in high traffic areas.”
Well managed condo corporations have learned how to spend money redecorating or renovating in a way that maintains or adds to value without overdoing it. When budgets are tight changing art, painting or re-upholstering with fire retardant materials can be an inexpensive upgrade. Create more variety with plants. Improve lighting for safety also enhances ambience. These changes are uplifting and fresh, avoid outdated décor and keep the condo up to code.
While allocating sufficient resources from the reserve fund, they can be doing smaller changes within their working capital budget with the awareness that communities failing to upgrade or redesign common areas once every ten years tend to stagnate. Buyers become less interested in a property, resale values decline, and owners may be unable to sell.
Curb appeal, or first impressions, will increase resale value. Done well, common area improvements will translate into higher resale values. Keeping areas up to date and well maintained is the goal. Curb appeal is the result of thoughtful planning and attention.
Unlike rental properties, condo corporations tend not to consider marketability. They should. Marketability is a measure of the attractiveness of a property in the current and future market. It explains why a neighbouring building is more or less popular as reflected in resale price and impacted by quality of amenities. Outdated, old and underutilized amenities detract from marketability and resale price. Condo boards can help by educating residents on the importance of being marketable.