Barrera and Company specializes in Reserve Studies that help communities protect their property value by planning for the future. Our reports make it easy for HOAs to set realistic budgets that combat against the dreaded special assessment. This alone is a necessary first step. But, we highly recommend taking a good hard look at your expenses as well. We help Associations determine what needs to be set aside but, at the end of the day, they have to find the funds. The good news is that there are always pennies to be pinched (and reallocated towards reserve funds!)
Here are a few ideas:
1. Consult with your insurance agent
Insurance is probably your Community’s largest expense. It’s extremely important that you have the right coverage in place for the right price. The insurance world is in constant flux and is best understood by your local agent. At the very least, do an annual review with your existing agent. With an expense this large feel free to do some annual shopping around as well.
2. Take a look at utilities
This is probably your second largest expense so it pays (literally) to keep an eye on it. The lowest hanging fruit here is your bill. Keep an eye on it for major rate hikes and/or spikes in usage. Feeling a little more proactive? Great! Check out local rebate programs for energy and water efficient retrofits. You might be able to upgrade to low flow toilets, and LED lighting for little to no upfront cost. For bonus points, consider low maintenance, drought tolerant landscaping.
3. Negotiate contracts
Most Boards oversee contract workers. Try to meet with each of them at least once or twice per year to evaluate their work and your rates. Again, don’t be afraid to shop around for better prices.
4. Separate needs from wants
We’ve seen communities cut reserve funds in order to refurbish the club house. This is a great example of short sighted, irresponsible decision making that happens all too often (sorry to be blunt). This will inevitably lead to special assessments and lower property values (try selling a condo in an under funded Association).