4 Ways to Cut Cost and Keep HOA Assessments Stable

Stop raising assessments. It’s a universal request, whether you’re part of a high-rise association in Los Angeles or an active adult HOA in Palm Springs. And while there are many good reasons to raise assessments (let’s face it, keeping assessments low at all costs can actually hurt your community’s relevance and cause property values to suffer), no board wants to be the “bad guy.” So before you raise assessments, take a look at these four cost-saving methods.

1 ENERGY

In California (and everywhere else), it’s clear that energy costs are on the rise. And making changes to boost energy efficiency is a reliable way to save money in the long run. Partner with your professional community management company to find ways to boost energy efficiency. For instance, you may install light switches with motion detectors so that no lights can be left on when the room is unoccupied. A long-term solution (like replacing all traditional lighting with LED lighting) may require a bigger investment upfront, but will likely save money in the long run.

2 RESERVE FUND INVESTMENTS

Are you getting the most out of your reserve fund investments? Most board members aren’t sure. In fact, in our 2018 HOA budget survey, 72% of board members said that they weren’t completely confident in their returns on reserve funds and/or operating funds. Partner with your association management company and review your current investment plan to see if there are opportunities to increase your returns.

One single-family home community association in Dana Point partnered with FirstService Financial and increased their annual interest earned by more than $27,000.

3 HOA INSURANCE

If you haven’t reviewed your HOA’s insurance coverage recently, you may be paying more than you need to in premiums or deductibles. It’s important to work with a trusted insurance broker or agent that has experience with homeowners associations and can work with yours to get the best rate.

4 VENDOR CONTRACTS

In our 2018 budget survey, over 57% of surveyed board members said they weren’t sure if their property management company asks vendors whether there will be cost increases in the following year’s budget. In fact, by reviewing contracts regularly and communicating with vendors consistently, you may be able to uncover cost savings.

OTHER HOA COST-SAVING OPPORTUNITIES – INVESTMENT POLICY

While these four areas of cost savings are a good starting place, it’s important to note that this is not an exhaustive list. A good way to evaluate potential cost savings in your investments particularly is by creating an HOA investment policy. An HOA investment policy is a guide you can use to help you uncover better returns on your reserve funds and potentially save money in the long run.

Sierra Carr, CMCA, is the comptroller for Trilogy at La Quinta and works for FirstService Residential. She can be reached at (760) 702-3038 or by email at scarr@mytlq.com.