In communities, homeowners associations (HOA) work hard to improve the lives of all their constituents. Several projects are undertaken with the help and cooperation of their community members. However, some HOA projects often fail due to a lack of funds.
If you are part of the HOA in your community, you are in luck. We will be talking about the best practices to manage your HOA budget.
1. Have a Reservation Fund
An HOA is responsible for a lot of things. This includes the management and upkeep of common areas, clubhouses, parking lots, tennis courts, and so on. The most common thing that ends up taking the most expense is the management and upkeep of the lawns and landscaping.
To help keep the lawns and landscaping looking great and prevent these expenses from hurting the budget, you should establish a reserve fund. The reserve fund is your savior when the homeowners do not pay their dues on time.
2. Utilize Volunteers
Your HOA can benefit from the help of volunteers to help with landscaping, painting, or mowing. This will significantly reduce the cost of the HOA. It will also lengthen the life of the equipment used in these projects.
3. Prioritize HOA projects
Every year, your HOA will be taking on several projects. These projects will result in several expenses. To minimize these expenses and ensure that your HOA is not spending beyond its budget, you should prioritize the projects.
Prioritizing the projects will help you make sure that you focus on the projects that matter the most to homeowners.
4. Budget Meetings
You should hold budget meetings to help the homeowners understand the HOA project’s budget. Invite the homeowners to attend and ask them to participate in the budgeting process. This will help you get the homeowner on your side and help you get their support for the HOA project.
5. Expect Increasing Expenses
Your HOA expenses will vary from project to project. Some projects will be more expensive than the last ones. This is especially true for projects that are done for the first time. To make sure that your HOA does not go over budget, you should budget for the additional expenses incurred because of a larger than expected cost. This way, you are not caught off guard by a large expense.
6. Purchase in Bulk
You can buy supplies in bulk to give yourself a discount and get more value for your money. Make sure that you purchase only what you need. You should also give preference to nonperishables and items you will use immediately. You can even find a supplier to buy all materials from them.
7. Audit Your Finances
You should have a system in place to regularly audit the HOA finances. This will help you spot financial irregularities and ensure that the money spent is appropriately spent. You should also check the inventory to see if there is an excess of supplies. If there is an excess of supplies, you can donate them to charities or local schools. You can also monitor the HOA bank account to ensure that your HOA has safeguards and is not taken advantage of.
By keeping the seven points above in mind, you can manage your HOA budget better. These tips will ensure that every penny is well spent for the betterment of the community.
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