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Advice | BarreraCo

Water Conservation – Save the Planet, Save Money

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Water ConservationMany states, including our home state of California, are experiencing record low rainfall this season – an event that is sure to trigger tighter water restrictions for your Homeowners Association.

But the time of year or current conditions should not dictate your decision to pursue water efficiency. The bottom line is that saving water saves your HOA money – and all communities could do with a little extra room in this year’s budget.

With that in mind, we’ve put together 4 tips to help you save water and save green.

1. If you fail to plan, you plan to fail.

First things first – develop a water plan that’s made for your community. If mandatory water restrictions are in place, some communities often need to participate in a designated water budget program or water only on assigned days. Water budgets typically determine a specific number of gallons per square foot, inches per year or a percentage reduction of water use. While participating in such programs, communities can typically chose to water how and when they want as long as they are meeting the terms of the water budget. An irrigation professional can help you determine the best plan for your community.

2. Not being proactive can cost you.

Proper maintenance of irrigation systems are often overlooked and categorized as an unnecessary cost. The truth is proper maintenance is one of the best ways for your HOA to save water and money.

Multiple times per year, the system should be checked for broken heads and leaks. Make sure the heads are pointing in the right direction and that the spray is not blocked by other plants or tall grass. If the water pressure is too high heads may mist or fog, resulting in water that never hits its intended target. Installing devices that regulate the pressure will help you more efficiently and effectively water your property. Look into installing high efficiency nozzles – some of which are even rebated by your local water agency. Lastly, consider replacing heads with drip irrigation whenever possible.

3. Be smart about it.

Smart controllers take into account soil type, rain fall and plant requirements to deliver only the amount of water needed. The cost and features of such controllers vary but some can be completely controlled remotely via the Internet.

Some HOAs may deem smart controllers out of their budget but all should strongly consider installing rain sensors. This affordable yet effective device simply prevents the irrigation system from watering during the rain.

Again, some water utilities provide rebates that make upgrading a no brainer.

4. Don’t make a rookie mistake.

Not all landscape professionals are created equal. In fact, many are not irrigation experts at all. It’s important to make sure that your contractors keep in mind and are equipped to help you optimize your property for water efficiency. Work with them to determine the best water schedule, appropriate plant choices and available rebates.

Read More: Water Efficient Landscape… The Easy Way!

Interested in getting a Reserve Study for your community? Click here to get a proposal!

Top 10 Home Renovation Projects

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Many homeowners are looking for ways to improve the value of their properties. In this article, you’ll learn about the top 10 home improvement or renovation projects that offer a solid return on investment, listed from least to most costly. So, whether you’re just wanting to “spruce the place up a bit” or are looking for a way to get the most out of your old home to help pay for your new one, there’s something here for nearly every budget and dream.Garage Door

1. New front door – Replacing your old, tired front door with something more stylish is a rather inexpensive way to add some new value to your home, as well as to your curb appeal. Experts say that an upgrade to a steel door is a great investment, but warn against choosing a door strictly for its energy rating. Turns out homes lose more heat through gaps around the door than through the door itself.

2. New garage door – To echo the first item on this list, garage doors need some love too.

3. New siding – Give your entire home a facelift with a new cladding of vinyl siding. While this project is more expensive and complex than the first two, it is still relatively quick and budget-friendly while adding value and improving the look of your home.

4. New deck – A deck is a lovely and functional transition from inside to the outdoors. A new deck can be built over an existing but outdated patio or can replace an old, sagging wooden porch on the back of your home. The return on your investment is either years of enjoyable leisure, or about 75% of the costs, depending on whether you stay or go.

5. Minor kitchen updates – You don’t have to go all out. Consider replacing just the countertops, adding a backsplash, purchasing a sleek new appliance, or swapping the faucet for an elegant, water-saving model. Something as simple as new light fixtures or cabinetry hardware can add value, style, and atmosphere to an otherwise less-inspiring cooking cave. The budget and extent of the makeover is up to you.

6. Window replacement – Give your home an aesthetic and energy-efficiency makeover with new windows. While the budget for this project is larger, it’s well worth it and can pay for itself in climate efficiency over time.
7. Attic remodel – If you’re considering a real undertaking, turn that old, dusty attic into the master suite, library, or nursery of your dreams.

8. Basement remodel – Similar to the attic project, only in the basement, you’ll want to focus on family space. Adding family or “public” space in the basement can take you from cramped and cranky to peaceful and harmonious.

9. Major kitchen overhaul – And sometimes you do have to go all out. Kitchen remodels are pricey and require you do McGuyver kitchen space somewhere else in your home, but remodeling the heart of the home comes with many benefits, including a more beautiful and functional space and a solid ROI to go with it.

10. Second floor additions – You can nearly double the value of your home by doubling its size and functionality. Adding an entire floor, or even just a master suite, over your existing home can bring in a 65% or more increase in the sales price of your home. It also saves valuable landscaping and outdoor living space—a plus for smaller lots and cramped neighborhoods.

If 2014 is the year of the fresh home design for you, you’ll be off to a great start with any of the items on this list. Whether you gather your supplies for a DIY weekend or call your favorite local contractor, you’re in for a treat. Good luck!


 Read More: DIY Home Renovation Blunders to Avoid

Interested in getting a Reserve Study for your community? Click here to get a proposal!

Should HOAs Invest Reserve Funds?

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Investing Reserve FundsCommunity Associations, at various times, collect money to fund reserves and/or for working capital. Is it wise for Associations to invest these dollars while they are accumulating for future repairs and replacement of the Communities’ assets?

The answer is yes – but through well-informed decision making.

The first important thing to remember is that Reserve Studies assume some level of interest is being earned on reserve account balances.

However, these assumptions are relatively conservative with respect to the interest earned. Typically it will range from one to three percent.

But it’s important to note – the interest-earned component is an integral part of the funding plans for reserves. Therefore the Association should always have in place a policy or strategy for keeping the reserve balance in some low-risk, interest bearing account.

Put simply – Your HOA should seriously consider developing and approving an investment policy to help maximize the interest income while minimizing risk. For example, your policy should list types of acceptable investments as approved by the HOA Board of Directors. They might include Certificates of Deposit (CDs), Money Market Accounts, FDIC insured banks or other investment companies that are pre-approved by the Board.

The idea here is to make sure your money is always working for you but don’t lose sight of the inherent risk involved with investments. Always consult the appropriate professionals when setting up your policy.

Read More:  The role of an HOA board


Interested in getting a Reserve Study for your community? Click here to get a proposal!

Reserve Studies and Funding : Survey of 400 community managers

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A couple of months ago, the Foundation for Community Association Research conducted a survey of almost 400 community managers.

When asked whether or not the associations had a formal reserve fund, 93% of respondents stated that their association did, but the most interesting find of the survey has to do with the level of funding within these funds.

When asked the question “How does the association determine how much to keep in the reserve fund?” almost 20% responded with “What the association can afford to set aside,” but that they “do NOT believe is adequate”.

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While almost 75% of survey respondents indicated basing their reserve fund levels on the recommendations of professional Reserve Specialists, over 25% indicated that the amount in the Reserve Fund is dictated by whatever the association can afford to set aside.

For Homeowners Associations and Community Managers, this scenario can quickly become dangerous if a costly or emergency repair arises. More importantly, is that ultimately the reality and cost of underfunded reserves is passed on to the homeowners themselves. If an HOA can not properly maintain roads, pools, or roofs the value of residents’ properties may be harmed. When HOA’s resort to special assessments, the cost to owners can run in the tens of thousands of dollars – no small expense for the average homeowner.

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For owners and buyers, here are some quick tips to help you evaluate the financial health of an HOA:

  • If you are a buyer, demand that the seller provide you with copies of the most current financials for your review.
  • If you are an owner, make sure that you are given annual financial reports, especially the delinquency report and those pertaining to the adequacy of the reserve account.
  • If you are a buyer, do a physical review of the property and observe how the common areas are maintained. For example, assess the condition of exterior paint, amenities, roads, roofs, drives, fencing, etc.
  • If you are an owner, be involved with the board and its decisions, especially when you see deferred maintenance of common areas or are subject to special assessments.(Joseph Aiu, California Department of Real Estate, 2012)

For more information on the effects of Underfunded HOA’s,  read this Consumer Warning from the CA D.R.E.

All images taken from CIARF.org’s Snap Survey : Reserve Studies and Funding.

Click here to download the report.

To find out more about our procedures for conducting reserve studies, or to be in touch with a reserve study specialist click here or give us a call at (800) 543-8670.

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HOAs – Don’t Let This Happen to You

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At Barrera and Company, we’ve helped thousands of clients anticipate and prepare for their community’s major repair and replacement costs by providing them with affordable and accurate Reserve Studies to meet their needs. In doing so, we’ve saved them tons of time, energy and money.

However, this economy has some HOAs struggling to make ends meet. As a result it’s way to easy to adopt the “out of sight, out of mind” mentality. Skipping your next scheduled Reserve Analysis is bad but underfunding your Reserve and ignoring upcoming repair and maintenance costs is even worse.

“If you fail to plan, you plan to fail.”

We’ve seen this time and time again. You may think you’re saving money but you are setting your community up for failure in the long run. Failing to plan ahead does not make the issues go away. In fact, they’re getting bigger and more expensive by the minute.

Short-sided community management will inevitably culminate in the form of Special Assessments, or worse, devalued real estate.

After looking closely at roughly 1000 past clients, we made a startling discovery.

Watch as our Chairman of the Board, Damian Esparza reveals our findings at recent conference for HOA board members.

HOAs, don’t let this happen to you!

At Barrera and Company, we complete thousands of Reserve Studies each year which have helped our clients comply with the law and prepare for upcoming expenditures. But don’t take our word for it, check out some of our projects and recent reviews.

Interested in getting a Reserve Study for your community? Click here to get a proposal!