Though it's a few months away, the calendar is racing toward out Summit House Annual Meeting. That is when our Board announces the dues we will pay in the coming year. If the past repeats itself, some Board members will say costs are going up and dues need to be increased. While the monthly costs of Summit House can change, the average annual amount needed for long term infrastructure maintenance called reserves has not changed for several years. It's a good time to ponder protecting the large amount each of us has at stake in our unit.
A remark often repeated at Summit House meetings is, "Let's spend money on this. It will raise the value of our units." No one asks, "How do you know this to be true?" While maintaining our building's infrastructure is necessary, few specific expenditures are magically offset by added value to your unit. Whoever said, "There's no free lunch" understood reality.
One variable our Board controls does affect the value of our units. It is our dues. This is inevitable because every person in the world has some finite amount of money. No one's budget, even Warren Buffett's, is infinite. It is some number. This means every dollar we spend on dues is a dollar not available for something else. The higher the dues, the less any potential buyer of your unit can pay you. To confirm this, look at advertisements for condo units. They all list the condo fee and taxes. These two variables plus interest rates determine what any given person is able to offer you. They affect a cash buyer's offer too because he/she compares earnings on savings with an investment in our condo.
While our monthly condo dues need to be high enough to maintain our building, we should all be aware higher dues means a lower price when our time comes to sell.
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