One of the main challenges that HOAs face is how to improve their budget for the upcoming year. Many homeowners associations do not take the time to examine their existing policies and come up with viable solutions that are more cost-effective to their communities. If HOAs were able to look at their costs to find areas for improvement, they may be able to have more cash in reserves to avoid additional fees to their residents. If you are trying to design the ideal budget for your association in the year ahead, consider the information below:
10 Powerful Tips To Keep Your HOA Cost-Effective
1. Designing an Updated Website
One major expense that your HOA may have is the need to update your website. This is particularly true if your association has not digitalized enough of its resident services. What is important to understand about websites is that the initial investment will be costly, but the time reduction spent for HOA board members and residents will be worth the investment in the long-term. Also, associations will receive fees faster from members if they can digitalize their offerings. Shop around to several different website providers to find the best possible package that matches the size of your community.
2. Review Your Upcoming Expenditures
Each year, the budget of your HOA may shift. It is wise to look over which upcoming expenses may be changing so that you will know what additional funds that your budget will need in the upcoming year. It is also possible that you will have expenses that you will not need this year. Keep the upcoming additional cash to put in the reserves of your HOA. This way, you will be able to have additional cash if any emergencies should arise during the upcoming year.
3. Assess What Your Common Areas Will Need
Common areas will need additional repairs at times. Your HOA needs to assess your common areas and figure out if any additional expenses will be required in the upcoming year. Once those expenses have been totaled, then you need to make room for those expenses in your association budget.
4. Examine Existing Vendor Contracts
Vendor contracts are one of the largest potential improvement areas for improvement within your HOA budget. If you have vendors that you have been using for a long time, try to lock your existing pricing with them. If you are shopping for new vendors, be sure to ask about bulk pricing. By asking about bulk pricing, you will be able to save additional capital when you are paying for services that will be required by your association.
5. Balance Employees Versus Independent Contractors
When considering what kind of staffing your HOA requires beyond the board, ask whether you need a full-time employee or whether an independent contractor would be a better option. Typically, full-time employees cost additional capital in terms of benefits that could become expensive to your HOA. If you hire an independent contractor, you will be able to save additional capital and allocate that capital elsewhere in your budget. Independent contractors are becoming quite common and are saving organizations capital all over the country.
6. Price Out Outside Advice
There are times when your HOA is going to need outside expertise. If you anticipate certain circumstances where you are going to need outside expertise, then it is important to be prepared to pay the fees of a lawyer or accountant, for example. The better prepared your association is for the additional costs associated with receiving outside expertise, the better off your budget will be in the year ahead.
7. Consider Collaborating with an External Management Company
Collaborating with an external management company can bring many benefits to your HOA. Be sure to price out several different options to see how you can customize the ideal package for your particular community. By working with an external management company, you may be able to save a great deal of capital than if you completed each service with only the members serving on the board of your HOA.
8. Eliminate Wasteful Spending
Wasteful spending is something that can hurt the budget of many HOAs. Your HOA board needs to sit down and assess each expense and whether it is necessary for the community. Once a list has been made of expenses that can be reduced, then a new budget should be totaled to see how much room is in the budget for the upcoming year. HOAs that do this will be amazed at the available funds they will discover from simply eliminating their wasteful spending.
9. Schedule Regular Budget Meetings
Many HOAs make the mistake of discussing the budget once per year. It can be valuable for HOAs to schedule regular budget meetings to assess whether they are on track for their annual goals. If during the year, additional expenses arise, having meetings is an excellent way to deal with these expenses and figure out additional ways to make adjustments in the remaining budget for the year.
10. Consider What New Dues Are Being Paid
HOAs need to evaluate which of their units is having a new homeowner or losing a homeowner. If occupancy rates increase, then the HOA will have more income to allocate for their expenses. By having a comprehensive list of what the increase in residents will be, HOAs will be able to decide what additional expenses they will be able to afford in the upcoming year.
How HOAManagement.com Can Help
HOAManagement.com has a great deal of expertise in working with HOAs located all over the United States related to the many issues that their organizations face. Our team has the required technical skills to design a custom affordable website tailored to your HOA’s particular needs.