does anyone have any input on high maintenance fees. i am looking at a junior 4 or large one bedroom and i am seeing both coops with low and VERY high maintenance charges. from what i have seen the low end is $1,100 and the high is $2,000. I ask for financials and most of the high maintenance coops have increased maintenance charges around 26 - 30% since 2007 on average, have limited cash in the... [more]
does anyone have any input on high maintenance fees. i am looking at a junior 4 or large one bedroom and i am seeing both coops with low and VERY high maintenance charges. from what i have seen the low end is $1,100 and the high is $2,000. I ask for financials and most of the high maintenance coops have increased maintenance charges around 26 - 30% since 2007 on average, have limited cash in the reserve fund (say less than $300,000) and have what i would consider large annual assessments on top of all of this - 10% of the monthly maintenance charges. is all of this normal in NYC? a lot of the places i have seen and we are talking more than at least 40 dont even make a profit before depreciation and amortization unless they pass an assessment charge onto the owners of the building. am i overthinking this?
thanks for any knowledge you can share
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Response by lad
over 15 years ago
Posts: 707
Member since: Apr 2009
Do the buildings you're looking at have comparable amenities?
We have a junior 4/large one bed with maintenance in the low end of your range, but we pay for our own heat and water heat and have no amenities or services other than a guy who moves the trash to the curb and sometimes vacuums the hall.
So our maintenance is "low," but when you look at what we get and what our building debt load is, I'd argue it's actually high.
Real estate tax increases since 2007 have been killer, so maintenance increases will be the norm. To keep the increases sort of palatable, some buildings (including mine) are running on shoestring budgets that assume all will go well. If all doesn't go well, they'll either need to assess or use reserves to pay for repairs.
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Response by technologic
over 15 years ago
Posts: 253
Member since: Feb 2010
There are two things that have really driven maintenance up in the past few years: (a) real estate taxes; and (b) labor/union. Our building used to have a very good cash reserve, but due to those two things, we've burned through a lot of that plus had a year long assessment for 2010 and are in the middle of another one for 2011.
Not much the building can do about (a) except hire a tax lawyer who contests taxes (this oftentimes can result in a substantial reduction). Dont even get me started about (b) as I am not a union fan.
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Response by ab_11218
over 15 years ago
Posts: 2017
Member since: May 2009
may buildings got used to the flip taxes that were collected during the bull market. they saw the flip tax as a subsidy to maintenance charges, not as a prop for reserves. because of that, many buildings had no choice but to increase maintenance significantly more then other buildings.
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Response by dylan621
over 15 years ago
Posts: 30
Member since: Feb 2011
Maintenance has been increasing for the last few years for the reasons tech said in addition to higher fuel costs. It really comes down to what you're getting for the maintenance. A well maintained building costs money to keep it well maintained in terms of the staff that it employs. If the building has a doorman, large staff, the unit has an outdoor space or is bigger than most junior 4s it's understandable that maintenance is higher than some comps. Also, if there's no flip tax that may equal out some of the comps you're looking at with lower maintenance. Check out this article - http://www.smartmoney.com/personal-finance/real-estate/co-op-maintenance-fees-are-rising/
Do the buildings you're looking at have comparable amenities?
We have a junior 4/large one bed with maintenance in the low end of your range, but we pay for our own heat and water heat and have no amenities or services other than a guy who moves the trash to the curb and sometimes vacuums the hall.
So our maintenance is "low," but when you look at what we get and what our building debt load is, I'd argue it's actually high.
Real estate tax increases since 2007 have been killer, so maintenance increases will be the norm. To keep the increases sort of palatable, some buildings (including mine) are running on shoestring budgets that assume all will go well. If all doesn't go well, they'll either need to assess or use reserves to pay for repairs.
There are two things that have really driven maintenance up in the past few years: (a) real estate taxes; and (b) labor/union. Our building used to have a very good cash reserve, but due to those two things, we've burned through a lot of that plus had a year long assessment for 2010 and are in the middle of another one for 2011.
Not much the building can do about (a) except hire a tax lawyer who contests taxes (this oftentimes can result in a substantial reduction). Dont even get me started about (b) as I am not a union fan.
may buildings got used to the flip taxes that were collected during the bull market. they saw the flip tax as a subsidy to maintenance charges, not as a prop for reserves. because of that, many buildings had no choice but to increase maintenance significantly more then other buildings.
Maintenance has been increasing for the last few years for the reasons tech said in addition to higher fuel costs. It really comes down to what you're getting for the maintenance. A well maintained building costs money to keep it well maintained in terms of the staff that it employs. If the building has a doorman, large staff, the unit has an outdoor space or is bigger than most junior 4s it's understandable that maintenance is higher than some comps. Also, if there's no flip tax that may equal out some of the comps you're looking at with lower maintenance. Check out this article - http://www.smartmoney.com/personal-finance/real-estate/co-op-maintenance-fees-are-rising/