How to Keep Assessments Low in Your HOA
Member satisfaction is a key element to running a successful HOA, and raising assessments is not something most board members want to face.
Assessments must be high enough to cover the needs of the community, but low enough that homeowners are able to pay them regularly. It’s a delicate balance, but entirely possible.
Here are a few strategies that can help your HOA save money, circumvent assessment increases, and keep costs consistently stable:
When it comes to regular expenses, be careful not to simply accept the status quo. By simply rolling over vendor contracts year after year, you may be overlooking built-in increases and end up paying more than you should for the same services.
It’s always a good idea to review contracts as they come up for renewal and request competitive bids from a few other vendors. You might also consider shopping around for a better price on expenses like annual insurance premiums and utility providers!
Maintenance is Key
As nonsensical as it sounds, if you want to save money, you’ve got to spend it … wisely. Large repairs and replacements of community facilities and equipment is extremely costly. The longer you can wait before needing to do them, the better. Regularly maintaining these community elements to ensure that they function well for as long as possible comes at a cost; however, prolonging their working life will save your association money in the end.
Consider your Collections Process
Have you ever considered that the way you try to collect assessments could actually be costing your association money? Even in the best communities, delinquencies are inevitable. When homeowners fail to pay their assessments, moving to legal action too quickly is often a costly mistake made by the board.
Remember that you have middle-ground collection options, including exclusion from association amenities, association collection agencies, and credit bureau reporting.
Expensive legal action should always be a last resort.
Put Technology to Good Use
Manual processes that can be automated waste both time and money. The good news is that technologies all throughout the community association industry are very often compatible with one another. This means that instead of the association having to use billable hours to process monthly payments, the board could set up a lockbox that allows homeowners to mail them directly to the bank. Statements can then be sent automatically to management software, and then immediately posted to the association web portal for homeowners to see.
Cut the Waste
One of the easiest ways to reduce or maintain HOA fees is for the board to take time to review its expenses. Each year as part of the annual audit and budget review, it’s a good idea to compile a list of areas where the association can cut costs without sacrificing the integrity of the association. Perhaps a watering schedule could be reduced, or parking lot lighting hours altered during summer months. Determine which expenses are essential and which could be reduced or eliminated to save money.
Recognizing and implementing ways to save money is just one of a long list of HOA board responsibilities.
An experienced management team can help implement these and other money-saving strategies to help keep assessments stable. Here at Spectrum Association Management, we pride ourselves on taking a fresh approach to association management.