After many years in the industry collaborating with Associations to better their community, we have noticed some common problems and hurdles that HOA’s must overcome in order to be healthy and to stay aligned with its goals. Today begins our first blog post of many identifying these issues. This will be merely a brief description of the issue — feel free to reach out to us for more information about a certain topic if needed!
Issue #1: BUDGETING
This is an obvious necessity when it comes to maintaining a financially healthy HOA. At the end of each year, you must spend time planning for the coming year. Attempting to get through a year without preparing and following an annual budget would be like paddling a canoe from Florida without a compass or a map, and hoping you somehow make it to France. Sounds crazy, right? Yet, some Associations want to “wing it” financially and hope they get through the end of the year in the green. Without a map or a compass, it’s impossible to know where you’re going – you need a plan. Likewise, without a budget (your financial map) it’s very hard to end up where you need to be.
The budget is vital, and that’s why creating a budget and advising Associations on how to stay within that budget is one of the first and most valuable things we do for an HOA. What are the wisest ways you can spend money? Has this expense been budgeted for? If not, will there be surplus from another area that could cover this cost? Frankly, if an item isn’t in the budget or absolutely necessary, we don’t advise spending money on it. Being responsible with the money that’s been given to you by homeowners that trust you to use it wisely is the best way to keep a reasonable dues figure, and to earn and maintain the trust of your friends and neighbors around you.