Great Budget Advice For The Homeowners Association
Posted on January 22, 2016 7:00 AM by HOA Sites
Categories: HOA Website
A great budget for the homeowners association requires more than listing expenses and establishing sources of income. The goal of a budget in the homeowners association is not only to provide a financial plan but to also prevent a downtrend in cash flow.
A well calculated budget takes into account many aspects that may not always show up on paper or the homeowner association website. Often, the best budget for the association is obtained by estimating a higher cost for items that are prone to fluctuating. The alternative could place an additional responsibility on residents in the form of a special assessment and homeowners tend to frown upon that.
What Items Are Critical In The Budget Process?
Obviously, there are items in the budget that consistently carry a fixed price but the challenge is predicting what can influence a change in those items. For some associations, an experienced manager is the key to accurately calculate a budget that coincides with actual expenses throughout the year.
Inconsistencies can be eliminated by having written agreements with vendors on the price of their goods or services instead of assuming the price will remain the same as last year. Especially for larger expenses, there could be changes that result in a significant increase so those expenses should be confirmed first and foremost.
Last But Not Least
Once the expenses are locked in, improvements can be made to the budget by conducting a reserve study to ensure common areas are well-kept. The reserve study is a great budgeting tool that measures the current state of deterioration in the community while predicting the funds essential to resolve those declining areas.
In any homeowners association budget, it is crucial to save a portion of the money to fund repairs of common areas. As well as frequently updating the homeowner association website to attract residents and promote a quality community!
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