Think Long Term for Condo and HOA Planning

Association's and their Board's sometimes seem to have ADD (Attention Deficit Disorder), and we really mean no offense by that. However, we notice more and more everyday that Association's tend to spend a lot of time juggling a number of projects. This tactic not only makes it more difficult for projects to be completed, but are also signs of a disorganized Board and Manager. This makes both homeowners and board members frustrated. A good Property Manager knows just how to overcome this ADD syndrome.

Board of Directors need to not only have a plan, but they need to work their plan through their manager every single day.

The plan must primarily include major capital expenditures, such as roof replacement, painting, and pavement resurfacing. Without a Capital Improvement Plan most Associations will have no choice but to defer major maintenance issues which will most certainly cost more in the end. Board Members should work with their Property Manager to develop a long term Capital Improvement Plan for adequate reserve funding.

Your plan should also include regular property maintenance from your Associations operating budget. These regular maintenance items include lamp replacement, tree trimming , or elevator upgrades. Repair items should be built into your monthly operating budget in order to avoid costly emergency repairs and to preserve the condition of the property. By performing regular repairs on a monthly basis and avoiding emergency repairs your Association will save in the long term. 

Board Meeeting

The Associations plan should also have a time frame built into it which sets expectations for the Property Manager, the Board, and homeowners as to when items should be paid for and completed. This keeps everyone on track and avoids the unnecessary juggling of uncompleted projects. 

In closing, a Board should always think Long Term. "What's here today is gone tomorrow" is not necessarily true for Community Associations because what's here today will only be a bigger more expensive problem tomorrow.

Our Property Managers in South Florida work closely with Board Members to develop property maintenance plans that focus on long term repairs that help increase property values in the association communities we serve throughout Miami Dade and Broward Counties.

5 Ways to Cut Your Condo or HOA Budget

It's September and before you know it the new year is upon us. Now is the time for your Condominium Association or Homeowners Association to begin working on it's Annual Budget for 2012. As always, Community Associations are looking for ways to reduce their operating budget without affecting Association services. In order to assist you through this process we've created our list of 5 Ways To Cut Your Condo or HOA Budget. 

There are many ways to effectively reduce a Community Associations Budget, however, we've had to narrow our list down to only five (we can't share all of our secrets with you!!). We hope you enjoy this post and if after reading it you have any additional suggestions, please feel free to share those with us and our readers in the comments section of our Blog.

Here are our five ideas for reducing your Community Association costs:

1)   Monitor your utilities... Utilities such as water and electricity are usually an Associations second largest expense item, after insurance. You'd be surprised what you'll find by just monitoring these utility bills on a monthly basis. Unexpected hikes in usage can be a great indicator that there's a leak somewhere and, believe it or not, catching it early may allow you to request an adjustment or credit from your utility provider. Our Property Manager's and Accounting Staff are trained to monitor these types of occurrences.

Switching to light bulbs that use less electricity have also shown to be very effective for Associations looking to reduce their expenses. Although they may be more expensive, their longer useful life coupled with the energy savings you'll see is certainly worth it!

2)   Focus on necessities... Although this may seem like an obvious one, it's a very important one. Many Association Boards have been able to reduce a lot of expenses by focusing only on the communities needs, rather than the wants. By doing so, you can plan accordingly for future items and put aside a few extra dollar's for those unexpected emergencies. For example, in the past, many communities would redecorate their lobby's and common area's on a more frequent basis. By extending the amount of time between upgrades you can really cut back on a lot of truly unnecessary expenses.

3)   Talk to your Insurance Agent... Insurance is an Association's largest expense, but likely it's most important expense and certainly not an area you want to play with. However, it's important that your Board communicate with your Insurance Agent more often than just once a year at renewal time. By opening the lines of communication your Insurance Agent will have your Association in mind when new markets open up or when insurance companies provide special service offerings or programs. You should be honest with your Insurance Agent and let them know that your Community Association is looking to tighten its belt, they may have some suggestions for you.

4)   Don't throw your money in the trash... Did you know that waste service for many communities has increased over 15% for the past 5 years? That's a huge increase when you do the math! Our suggestion is to deal directly with a waste service broker. A broker is able to provide your community the same or better service at wholesale prices, probably even through your current provider. A waste broker can provide an analysis of your service needs to make sure that you're container size is neither too large, nor too small, and that your service days fit your needs. Our clients have experienced savings of up to 25% in the first year. No one likes to throw their money in the trash!

5)    Negotiate... Now is the time to get started on negotiating all of your Associations vendor contracts. This should become an annual routine. If your community has been working with the same gate contractor or landscaper, let them know that you're interested in continuing to do work with them through the coming year, but would like to inquire about possible price reductions. You'd be surprised that many of them would be understanding. You may also want to bid out a lot of the work being done around the community to similar vendors. Competition is tough out there and there is always someone looking to offer the same or better service for a better price!

There is more to it than just these five tips, however. We provide our clients with an annual assessment of their service needs prior to assisting them with budget preparations. This keeps monthly assessments low, service offerings high, and residents smiling!