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Real Estate News

Homeowner Associations And Their Budgets


Written by Richard Thompson
Wednesday, October 30, 2013

Diamonds in the Rough

Many homeowner associations find it difficult to hold the line on expenses. Inflation erodes endlessly increasing budgets and members scream for relief. But help is on the way. There are practical ways to reduce costs without cutting services. The HOA's budget is like a collection of uncut gems of different type, size and quality. Some of them are diamonds in the rough just waiting to be set free. And like diamonds, your budget, with a bit of cut and polish, can sparkle. Here are a few examples:

Insurance. Raise the deductible and reduce the annual premium. Create a line item in your Reserve Study with a life of three years called "Insurance Deductible" equal to your deductible. If there is no claim during the three year period, the money is saved.

Pools. Check temperature and pump cycle times and adjust for savings. Swimmers may not notice a two degree drop in temperature, but lower temperatures significantly decrease the heating bill.

Lighting. Convert to high lumen-low energy lighting. The conversion expense is usually paid back within only one to two years due to reduced power and labor costs.

Distributing Information. Many meeting notices and information can be distributed to residents by way of flyer boxes like the ones used by real estate agents. Even better, distribute information by email for nothing.

Have an HOA Website. Enjoy HUGE communication savings with your own HOA website. Post important information like the governing documents, newsletters, meeting minutes and rules. Use email for maintenance and information requests so the information is moved quickly to the right person with a date stamped record. Poll your members on important issues or proposed policies. Notify them of meetings and other events. An HOA website is probably the best move your HOA can make to improve efficiency and reduce costs.

Preventive Maintenance. Catch problems when they are small enough to resolve cheaply by regular property checklist inspections. Of particular importance:

  • Carpet Cleaning: Professionally clean common area carpet at least once a year to prolong its life.
  • Gutters & Downspouts: Clean at least annually prior to winter or rainy season; clean out underground drains as needed.
  • Paint: Use only the highest quality paint suitable for the application for maximum performance and durability.
  • Roofs: Inspect and clean annually prior to winter or rainy season; look for obvious problems like missing shingles, breaks in the membrane; contract with a roofing contractor to perform this function automatically prior to winter.
  • Sidewalks: Inspect annually for tripping hazards; grind down or remove and repour.
  • Trees: Prune trees every 3-5 years to eliminate deadwood, enhance shaping and identify treatable diseases and pests.

Handyman Services. For HOAs that can't afford a full time maintenance person, contract with a licensed, bonded and insured handyman who can perform a monthly "laundry list" of small repairs. Combine tasks to provide a full day's work.

Wood Fences. Use a stain rather than paint since stain won't peel and requires less frequent maintenance. For cedar & redwood: Leave unpainted to age naturally. No stain, paint or sealer required. Use steel pipe instead of wood fence posts that don't rot.

Paint Supplies. Discuss special pricing options with local paint supply companies. If your HOA is large enough, it may qualify for contractor pricing.

Sidewalk Repair. Use a grinding service to repair walkway uplifts and tripping hazards instead of the replacing the concrete.

Water Usage - Exterior

  • Install a sprinkler system with a rain sensor to eliminate unnecessary cycles.
  • Early morning sprinkling reduces water loss from evaporation.
  • Adjust sprinkler heads frequently so water lands on the vegetation, not the paving.
  • Plant native and drought tolerant grasses, ground covers, shrubs and trees. Group plants together based on similar water needs.

As a jeweler carefully examines and sorts his gem stock, consider the ways your homeowner association spends its money. Cut and polish those items that aren't shining like they should. If you look closely, you will indeed find diamonds in the rough.

For more innovative homeowner association management strategies, subscribe to www.Regenesis.net



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