Homeowners associations exist because of and for the residents. Because of this, many HOAs are concerned with keeping costs as low as possible so that these savings can be passed down to the homeowners. In a shifting economy, keeping costs low can be a massive challenge. Committing to the following five tips will help to cut costs and lower HOA fees by extension.
Many HOAs spend a large portion of their yearly budget in maintaining full-time employees that complete tasks that could be done at a lower cost with vendors. Paying for extra insurance and salaries can cost more than the position is worth. Many of these jobs can be outsourced to a local vendor that can complete the task for a fraction of the cost of employing an inside person to do the job.
Know When to Invest More Money
Saving money sometimes means spending money. This is especially true when it comes to construction and maintenance. It is important, when embarking on a large repair or new addition, to ensure the quality of the building by paying a little extra. This extra money may put a bigger hole in your pocket in the short term, but will save both time and money by avoiding tedious unnecessary repairs down the road.
Stay On Top of Maintenance
It is important to be vigilant with regards to the maintenance of the property. Small leaks are much easier to fix than big leaks, and a small amount of mold is cheaper to get rid of than rotting infrastructure. Regular inspections should be scheduled to be sure that everything on the property is in good condition, and repairs should be dealt with in a timely fashion.
Maintain Detailed and Diligent Budgeting
A lot of money can be saved on a yearly basis by simply keeping meticulous records of all finances. If a budget is not under control, HOAs can find themselves wondering where all of the money went, and a lot of income can be wasted. Keeping detailed records and staying on top of your budget on a monthly and yearly basis will ensure that your HOA knows exactly where each dollar goes throughout the year. This will make it easier to find ways of cutting back and using funds more wisely.
Ask Yearly for Price Reductions
Many HOAs can get into a rut when it comes to their vendors and insurance companies. Although the task can seem time-consuming and tedious, it is important to contact your vendors each year to make sure you are getting the best prices. This can be done with insurance as well. Negotiations can be made on a yearly basis to lower your premium or keep it the same.
The biggest asset a board can have when trying to cut costs is a strong commitment to pay close attention year by year to the HOAs finances and yearly budget. Sticking to these five principles will help your board to save money and lower fees so that your community will be happy and thriving.