An important job when you are on the board of a homeowners association (HOA) is to properly manage the HOA budget. One way that you probably do this is by trying to get the highest-quality products and services at the lowest possible prices.
Sure, it’s great to save a couple of hundred dollars, but what if you could save even more? Some Nevada communities have done just that.
What’s their secret? These properties saved money by working with an experienced community management company
. If your HOA is self-managed, you may worry about the expense. However, the savings you reap year after year can more than make up for your initial costs. In fact, a good management company should be able to reduce your costs by enabling you to leverage its relationships with local vendors and its national buying power.
Perhaps you are already working with a community management company but wonder if you are paying too much for too little value. Here are four things a quality management company should be doing to help you stretch your association’s money.
1. Find the best vendors, and negotiate on your behalf.
It can be time consuming to vet potential vendors, get bids and negotiate pricing. And the last thing you want is to get charged unexpected costs or receive poor service. A well-established community management company will have strong relationships with high-quality local vendors. It will also be able to use its buying power to negotiate the best prices and obtain value-added services.
A number of associations throughout Nevada have reaped significant savings on their annual insurance premiums with the help of FirstService Residential’s affiliated financial services company, FirstService Financial
2. Conduct cost-benefit analyses proactively.
- A high-rise saved $7,000 on its Directors and Officers insurance while getting broader coverage and lower deductibles.
- A townhome community brought down its deductibles, added a $15 million umbrella policy and still saved $19,000.
- A Las Vegas high-rise saved a whopping $48,000—without losing any of its previous coverage.
A good management company should be seeking areas for savings proactively. Rodney Riepenhoff, west region corporate engineer and reserve study specialist at FirstService Residential, says that conducting regular reserve study analyses can save you money in the long run. The study establishes a timeline for updating your common elements, determines long-term replacement costs and provides a breakdown of how much you need to allocate each year so that your reserve is adequately funded. This can prevent unexpected costs and eliminate the need to take out loans or institute special assessments down the road.
Riepenhoff also stresses the importance of following the maintenance schedule outlined in your reserve study. Doing so will prevent premature equipment failure and associated costs.
3. Locate and apply for rebates and grants.
If your association has been delaying community projects because you lacked the funding, consider this: Historic preservation organizations sometimes provide grants for restoration projects, and utility companies may award rebates for energy retrofits. For example, a community association in Las Vegas converted all of its common-area lighting—a total of 175 fixtures consisting of streetlights, landscape up-lighting and monument up-lighting—to LEDs. As a result, the association received a rebate of approximately $3,600 from Nevada Energy.
Additionally, there are often federal, state, municipal or private organizations that offer grants for residential communities’ improvement projects. The city of Henderson offers one such program. Its Neighborhood Enhancement Grant
, available every November, provides up to $5000 to communities for projects designed to benefit the entire community. Although many such grants exist, they can be difficult to locate, and their application processes can be complex and tedious. This is where you can rely on the experience of a professional management company.
Having a great community management company can be the key to helping your HOA save thousands of dollars every year. To get more information on other ways a management company can help make your association’s money go farther, contact FirstService Residential
, the leading community management company in Nevada.