Condo management expenses can rack up if there if someone is not keeping an eye on them and documenting the costs. Condo associations have to be fastidious about controlling expenses. Board members owe their membership a fiduciary duty to manage the memberships’ collective financial interests responsibly, protect them against avoidable losses, and keep condo fees reasonable.
Tracking Condo Management Expenses
Here are a few practical measures your HOA and condo board clients can take to reduce their management expenses.
Practice Good HOA Financial Recordkeeping
To create an accurate operating budget, your clients need first-rate accounting programs. They should use secure, user-friendly software to track spending and reserves. Analyzing expenditures in detail helps them identify costs they may be spending too much on.
In addition, they need a property management platform to maintain detailed records about individual unit owners’ accounts, including payments and outstanding maintenance or assessment dues. Dealing with nonpayment issues before they escalate can reduce associations’ legal expenses and make collections practices more efficient.
Work With a Great Property Management Company
A good way to help your condo clients manage expenses is by encouraging them to cultivate positive working relationships with professional property managers. If a property management company needs to live up to expectations and provide adequate assistance with expense management, your clients need to address these issues directly. A meeting to clarify expectations may be in order. Alternatively, it may be appropriate to consider retaining a different manager.
If an association has been happy with a company’s services, entering into a long-term contract may be an excellent strategy to reduce HOA management expenses. It may be possible to negotiate additional costs, such as the percentages that companies charge associations for staff’s salaries.
Shop Competitively and Plan Expenditures Judiciously
Property management companies and self-managed associations rely on services and supplies from a myriad of providers to drive their day-to-day operations. They should shop for the things that they need competitively. Before renewing any high-value service contract or undertaking an improvement or repair project, conducting a thorough bid analysis that includes a minimum of three different estimates is a good practice.
Insurance premiums can be a big line item in condo management expenses. Help clients structure their insurance packages affordably. Identifying the right indorsements and excess liability limits based on clients’ unique needs will enable them to budget for policy protections strategically without compromising vital coverages.
Make HOA Operations Management More Eco-Friendly
Going green can reduce monthly expenses dramatically. An energy audit is a great starting place to find potential savings.
An HOA that has common areas with large square footage could benefit from comprehensive heating and cooling system maintenance programs. Making systems run more efficiently will allow buildings to spend less on one of their most significant energy needs. Likewise, installing LED lighting can yield appreciable savings on electric bills.
Installing low-flow sprinkler systems and plumbing fixtures can lower another big monthly utility bill. In addition, implementing new recycling programs could reduce waste management fees.
Ultimately, your clients will appreciate all of your input about the best ways to rein in expenses. Helping your clients implement innovative solutions to operate cost-effectively will reinforce the value of your professional insights and support.
About Kevin Davis Insurance Services
For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (855)-790-7393 to speak with one of our representatives.
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