Want to improve your COA’s cash flow? The size, growth, and projects in a Condo mostly depend on its community. Projects are mapped out, planned, budgeted, and determined to be important to a condo when community members are involved. This is because they are the ones to pay the fees and the special assessments when it is time to implement such projects. Expenses in condos come in other forms and even with the right budget, some factors like inflation can cause expenses to increase more than planned. Asking the community members to pay more fees can anger them and can ruin community growth. But are there other ways associations can generate more revenue without putting more pressure on homeowners with fees?
Revising budgets to maximize spending
Revisiting budgets to maximize spending is one of the best ways to increase revenue for a condo. There are things that are inevitable in a condo and that includes maintenance and community growth – doing things that are agreed upon and in the best interest of that community. Reducing spending can come in form of choosing sustainable means of achieving a goal. Like using solar-powered generators that cut back on fuel consumption. It can be choosing a different contractor who can get the same amount of work done but for lesser fees. Good accounting officers with experience in condos can easily achieve this through proper contract agreements.
Rent and Amenities
Most condos with foresight understand the idea of renting out amenities as a way to classify projects by importance. Condo projects are not just about beautification or providing the community with convenience. Projects that involve constructing amenities such as; an event room, a clubhouse, or a pool and pool house add value to the condo and also create an avenue to generate revenue for maintenance and other projects. Residents in the association can also rent these spaces for their family and business events at a discounted rate. They can be advertised for business meetings, birthday parties, dinner parties, and even fundraisers.
Holding fundraising events
The good thing about a community that is properly managed for growth is its understanding and rapport. But to achieve this, board members and managers must have shown a track record of trust and reliance. They need to prove that they make decisions that are inclusive of community members. This helps residents to be actively involved and also understand when situations change. While it may be tough to ask for more fees from residents, fundraisers can be organized. Yes, people do not feel comfortable when you impose things especially monetary responsibilities on them. But fundraisers are a way of showing both vulnerabilities of the managers and can get residents to willingly support projects in the way they can. Fundraisers are also a way to show accountability of funds to the community members by using the money raised effectively. Planning fundraisers can be hectic. But you can start by identifying the demographics of people, then planning the program according to their taste. Planners can also allow participation in other ways that are not just monetary.
Condos that use newsletters as a way of communication have a lot audience. Reaching out to local business owners or service providers who need advertisement is a huge way of generating income. It is always a win-win situation; they can pay before advertising, or pay per commission for every lead generated through the advertisement.
Most HOA find it difficult to adopt the idea of investing funds because of the risks involved. Also because they do not seem to understand the investments. There are simple things with low margins of risk that can count as an investment. Opening a savings account, getting a line of credit, and building credit are all investments that have low risks with high yield. Laundry machines, vendor units, and other public service businesses are also investment ideas that an association can leverage. Though it may require sizeable capital, it increases cash flow in the long term.
Fees are the major source of income for condos. Depending on the laws governing that locality, most management also charges special assessments in case of unexpected expenses. However, this is the last resort and most community members frown at it. But it does not have to get to that. Just like every other problem gets solved by deliberating and involving every stakeholder, cash flow problems can be solved in an association as easily.
Also, good cash flow is nothing if budgeting is poor. This is why every HOA should have experienced accountants that know how to plan, suggest and dictate what is good for the association. If you need to hire accounting services that will uphold the best interests of your HOA, then reach out to us, our experience and success cannot be too far from yours.