Managing the budget of your HOA can be challenging. A lot of HOA boards are still in the process of learning budget management as they go along. Because of this, budgeting mistakes can happen. But HOA budget management doesn’t have to be a tough experience. Your HOA board can rely on professional HOA management for help with this.
A lot of communities don’t look for ways to save money. However, using money effectively allows the board to do more for homeowners. This will increase the satisfaction of residents with current management. To maximize the money of your HOA, consider stretching the budget as far as possible. Also, you and other board members must be aware of some factors. Below are some tips to help your board manage the HOA budget:
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Learn to Prioritize Projects
HOA projects vary in terms of importance. But budget constraints can limit HOA projects. Your board should go through its projects and list them in order of priority. The most important projects must be prioritized, so you can allocate a budget for them. Then, consider the projects with completion expected by the end of this year. Spending money for projects that are nearly completed allows you and other board members to start planning for next year’s project costs.
Expect Increasing Expenses
Expenses are expected to increase every year. So, your board must anticipate this when allocating budgets for vendor services and utilities. Also, it is important to factor in the legal, accounting, and insurance services the board depends on.
Create Reserve Funds
Preparing for reserves is part of managing your HOA budget. Each year, your association must put aside a part of its income and keep it in a reserve fund. Such a reserve fund can be used for repairs, upgrades, and replacements to community facilities.
Negotiate for Better Prices
Contracts with vendors must be reviewed yearly. This ensures the board gets the best deals out there. Your vendors must provide your HOA with some incentive pricing, especially if you have a bigger community. Your board might get discounted maintenance rates and replacement parts. These perks must be taken advantage of to save money on community expenses.
If your association is planning a budget for next year, get help from a trusted partner. A financial expert can help your board with this task. Hire this expert from a reputable HOA management company. The expert can help your HOA board make informed financial decisions on behalf of the community.