Tips for creating an HOA budget or Condo Budget

Tips for creating an HOA budget or Condo Budget

HOA budget Vendor Contracts – You always want to insure the correct budgeting for all of your normal monthly service providers. Don’t be afraid to ask your landscaping company, pool contractor, and even management company, if they plan on changing their current rates. This is also a great opportunity to ask for their updated insurance information to make sure that is good standing as well. Also review current contacts to see if there are any CPI index clauses in their agreement. Nine times out of ten, if they are contractually able to increase their fees, most will do so. Budget for reserves – All associations should budget for a percentage of all income to go to their reserve or savings accounts. The percentage of income will of course vary depending on your association. The more long term liabilities and obligations you have, the more you should be putting away. We have some condo associations that are putting away as much as 20% of their total income towards long term savings. Condos generally have much larger financial obligations including exterior repairs and upkeep and maintaining private streets and roads. Not budgeting for reserves can lead to be big problems and potentially big special assessments down the road. Creating and maintaining an HOA budget is essential part of maintaining a fiscally responsible association. Even associations that are not as healthy financially as they need to be, with some small modifications, they too can be financially fit in just a short amount of time. If you follow some basic steps and continue to evaluate and adjust over time, your community association will thrive financially now and in the years to come….

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