Money is often an issue of concern whether talking about personal, household, business, or association finances. No one likes to spend more than they need to, HOAs included. But cutting costs doesn’t necessarily mean cutting quality. There are many ways that HOAs can reduce expenses while still providing services homeowners have come to expect. Kuester Management Group has released a statement to the press regarding opportunities for HOAs to improve their financial operations in the new year.
“Effective money management is key for HOAs,” says Bryan Kuester, President of Kuester Management Group. “When the board mismanages funds, this can lead to unnecessary expenses, levying special assessments, and raising fees. HOAs should work with their property manager and a financial professional to make sure they’re making the most of their budget and saving money where possible.”
One big opportunity for savings – or overspending – comes from vendor contracts. The HOA should take the time to review its current contracts and make services still align with the association’s needs. If the HOA is paying for extras that it does not need or rarely uses, this could become an unnecessary expense. Get quotes from several vendors and compare options. Determine who has the most competitive offer that meets the HOA’s needs.
However, don’t simply pick the lowest quote. Look at exactly what is included in the contract. HOAs may also be able to negotiate for a better rate or for discounts for bundling services. Consider what the community’s top needs are and what provider can offer the best deal. Property management companies can provide referrals for trusted businesses in the community as well.
Another area for savings revolves around energy efficiency. Paying a little more upfront to install energy-efficient systems, motion-sensor lights, energy-efficient bulbs, and programmable heating and cooling systems can pay off in the long run. Also, make sure that windows and doors are well-insulated to keep the heat and cold from escaping through broken seals or cracks. Have systems regularly serviced to ensure that they are in proper working condition and not drawing more electricity than necessary due to malfunctions.
“Engaging in preventive maintenance can help cut costs as well,” says Kuester. “Take care of smaller problems as they arise so they don’t become bigger issues. Don’t put off regular maintenance because conditions could quickly deteriorate and before you know it, the HOA has to invest in costly repairs or replacements they had not planned for.”
This is also a reason to ensure the association’s reserve fund is adequately funded to cover larger expenses such as replacing a roof or an HVAC system. The HOA should adjust its annual dues to align with the changing economy and cost of services. Small increases are often more manageable for homeowners than a sudden jump in fees after several years of no changes.
Kuester encourages HOAs to talk to their property management company about opportunities for cost savings in the new year and how to more effectively manage budgets. Kuester Management Group serves communities through the Carolinas and works closely with boards to improve operations, protect property value, and boost quality of life within HOA communities.
Kuester Management Group, a division of Kuester Companies, works to protect property values and enhance the quality of life in each of its managed communities. Providing a full range of association management services, Kuester Management Group has worked to foster strong, resilient, and unified communities across North and South Carolina. The company is proud to offer on-site property managers, all zealous for building strong communities meant to stand the test of time.
More information is available at www.kuester.com or @KuesterCompany.