To avoid running out of money, your co-op needs to adopt a well thought-out operating budget every year. Without one, you could find yourself facing a deficit, paying your bills late, cutting back on repairs to units and unable to update and replace worn-out building elements.
Begin the process by looking at your previous year’s budget. Ask what costs will be higher in the coming year. And remember to budget for special maintenance projects, like your common areas.
You will need to budget for vacancy losses and bad debts, though your co-op may be able to cut these costs over time. But don’t just assume this will happen. The board and your manager will need to understand the reason for vacancies and bad debts and work together to bring them down.
Once you’ve put it all together—not forgetting money set aside for future repairs and replacements—you’ll know what your housing-charge increase should be. (Remember to raise your laundry and parking rates from time to time, as well.)
Don’t pick a percentage increase “because that’s what the members will accept.” Be ready to explain the budget in detail and make the case for collecting the money your co-op needs. If you don’t get the full increase this year, try again next year.