Editorial: Doing the Math

We have been hearing  a lot about the $25.00 per month increase which the homeowners will incur in 2013.   Then, something which isn’t spoken about much, but which is sort of an elephant in the room, is that the shareholders do not pay rent.  A couple of shareholders have pointed out that they paid a lump sum of money to buy their shares, something which the homeowners did not choose to do.  It’s likely that everyone understands the reason why shareholders do not pay rent.

But there are two other numbers which some of you homeowners may have forgotten about when you are doing the math and thinking about the discrepancy.

The first is that all shareholders now pay property taxes which cost about $1,200 per year.  Homeowners pay a much smaller amount for their stickers. The second number is the amount of money which the shareholders would have been gaining through interest and dividends if they had invested their lump sums elsewhere. So that is a cost for them.

There really is no important point here except to put all parts of the money trail on the table for everyone to understand.  It’s easy to jumble these things  into a worrisome financial fruit salad , but actually it is an apples and oranges situation.

Let’s hope that the Co-op also is open about their finances so that everyone can appreciate the issues.  Hopefully, the forthcoming meeting will be helpful in that regard.

Our goal on the Forum is to get the facts, to discuss them, and then try to join together in finding solutions without the noise of misunderstandings.

If you disagree with any of this, let’s hear about it.  Comment below.

—Paul Goldfinger, MD.    Editor @Tropicanaforum.com

5 thoughts on “Editorial: Doing the Math

  1. Makes GREAT sense to me! We enjoy your well thought out commentary.Keep up the good work.
    Everyone had they’re own reasons for either buying in or renting; both had advantages and disadvantages.

  2. Everyone, who came to meetings and was concerned, knew there would be a property tax, that was another reason for me to not become a shareholder. I own other property that I have to pay property taxes on and did not want to have to pay taxes on my own little piece of sunshine where I live.

    With regard to the next to last sentence of paragraph three– I thought the shareholders were getting interest on their money, so why is that a cost to them?

    I don’t think we homeowners have forgotten about anything. I know they don’t pay “rent”, but it will take a long time to make up the difference between what I pay and what they pay because of their outlay of money. I won’t live that long.

  3. Homeowner: The shareholders who “bought their land” do not receive interest on their investment. One of the costs of their Tropicana share purchase is that they cannot invest that chunk of change in an interest bearing item like a CD. That is a cost that they accept now in exchange for the possibility that their Tropicana investment might yield a return down the line. A tangible return for shareholders is that they don’t pay rent any longer, but as noted, they do pay property tax.

    For those shareholders who bought an extra share as an income producing investment, they do get an interest check each month from Tropicana Co-op.
    –Paul

  4. Thank you. Actually, math is not a strong point for me. In high school, once when our math teacher called on me, his reaction to my answer was, “The sun is shining, my boy.” I never forgot that, whatever it meant.

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