Just about every homeowners association would like to save money. The benefits would be great for the homeowners, and the HOA board. There are many practical ways to save money in your association, without going to extreme measures, like removing green space, or drastically reducing water consumption. Furthermore, many HOAs have issues covering their operational expenses, and often end up charging homeowners additional fees by increasing dues. Even the hint of a dues increase can affect community morale and create tension with homeowners and the board of directors. HOAs saving money is for the benefit of everyone in the community. You need to look carefully for ways to reduce costs in your association, while still providing exceptional service. The following list offers some ideas.
With today’s technology it’s much easier to go paperless than ever before. If most of your communications are currently being printed and mailed, consider going paperless to reduce expense and become more environmentally friendly. Although paper may have been essential in the past, the advent of technologies now enables us to conduct business digitally or online. Instead of mailing out newsletters, announcements, and other community documents you can send them via email or text. When you consider all the paperwork in running an HOA, the savings can be substantial. With paperless strategies, you will be able to save money in HOA purchases each month, and you won’t have to allot that much on office supplies and other related expenses.
Review & Evaluate Service Contracts:
It’s probably a good idea to routinely review and revise service contacts with your vendors. Often this is one of the most overlooked ways to cut down on overall expenses. Plus, it can be one of the most significant ways to save on costs. Review and re-negotiate vendor contracts, everything from landscaping to maintenance, including legal and even office vending machines. When going into a new contract year, it’s not unusual for an HOA to be presented with an increase in fees. Consider seeking advice from your HOA management company, since they work with multiple vendors and can gage the potential for re-negotiation on services provided.
Hire a management company
Consider hiring a professional management company for your association. Maybe at first, this may seem like an additional cost, however a good management company can save you thousands of dollars. Plus, they can analyze your expenses and recommend efficient ways to reduce costs. They can provide one singular solution to administrative responsibilities like budgeting, vendor contracts, fee collection, violations, maintenance, and much more. Plus, they can provide the professional separation between board members and homeowners to alleviate possible stressful situations that may occur.
Review insurance policies:
In most cases, insurance premiums are rarely reviewed, and this can present one of your largest cost -cutting expenses. Consider renegotiating the high-cost premium with your current carrier or shopping around for better, lower-cost alternatives. Explore Insurance options, and don’t assume every company has the same rates for insurance. Do a little research and learn how premiums and coverage differ. And lastly, consider raising the deductibles to reduce your premiums. Consult with your insurance provider before making any major policy changes.
Invest in Preventive Maintenance:
Sometimes you may need to spend a little more money in the short term to save more long-term. Failure to overlook the savings that comes with regular property maintenance can be a mistake. By addressing issues early and developing a regular maintenance checklist, your community will save bucks in the future.
Negotiate Volume Discounts:
If you live in a large HOA association, you can save money in several important ways. Waste removal, cable, Internet, and phone services are a few. Often these communities can get volume discounts for homeowners, and even a “rebate” from service providers because the large associations can negotiate a volume discount. These discounts and rebates can mean big savings.
Evaluate landscaping costs:
Landscaping tends to be one of the highest-cost line items for associations. Everyone agrees it’s very important to maintain the physical appearance (curb appeal) of the property area. HOAs should evaluate landscaping fees to help find areas to reduce costs. On average, a typical community will spend anywhere from $45,000-$60,000 per year on landscaping maintenance. Finding ways to lower landscaping expenses go a long toward saving money for your HOA. Here are a few cost saving suggestions to consider: Reducing frequency of maintenance, go out for bids and consider alternative companies, replace high-maintenance plants with lower-maintenance options, request a water billing audit to ensure your not being over charged, and reducing greenspace with decorative ground coverings. These changes can deliver huge savings for your association.
Manage Legal Costs:
Attorneys are expensive and legal costs can quickly escalate out of control. While it’s your duty to make sure that your HOA follows the law, there are times when a legal expense may not be justified. For example, a lien may be more economical than a lawsuit when a delinquent homeowner is in the middle of bankruptcy or foreclosure. Discuss cost-effective options with your attorney and cost saving ideas to benefit your community.
Review the HOA’s current budget and financial record:
A working knowledge of the HOA’s finances will allow you to see opportunities to reduce costs in many areas, and often saving money for your community. An HOA must think like any business, they must find areas of opportunity to save and invest in long-term financial solutions. Work closely with your financial committee to dig into reports, review past statements and look for cost-cutting advantages. Don’t shy away from asking questions and learning what savings opportunities would be best to focus on.
Is your community seeking ways to save money? Consider hiring a professional HOA management company like AMC Inc. (Association Management Concepts). We’ll work with you to identify ways to cut costs, even if you’re a self-managed association. Contact us at 916-565-8080 ext. 324.