HOA fees are necessary to keep the neighborhood running smoothly. However, over time, the fees can continue to increase. Sometimes, these increases are necessary, but sometimes, there are places where spending can be reduced. Check out these three tips for reducing HOA fees in your community.
Read the HOA Budget
To start looking for ways to reduce HOA fees, check the HOA budget. Even if you aren’t on the HOA board, you still have the right to review the budget. Review it and look for areas that don’t make sense or areas that seem to be bleeding money. If you have any questions, get clarification from the HOA president. You may be able to come up with ideas to reduce spending, such as switching to a different contractor, reducing insurance premiums and deferring non-essential projects.
Review HOA Contracts
Other paperwork you should check includes the various contracts of the different contractors who work with the HOA, such as landscapers, general contractors, the property management company, etc. Many of these contracts may have been created years earlier. In some cases, the contractor may even increase the cost each year by default. However, you may be able to shop around or re-negotiate to lower the cost, which, in turn, can reduce monthly HOA fees. If you can’t re-negotiate or find someone cheaper, consider making cuts in how frequently the contractor provides services.
Check the Reserves
Part of HOA dues go into the HOA’s reserves. These funds are used for unexpected expenses, such as the clubhouse suddenly needing a new roof. Typically, the board estimates how much money should be put in the reserves by determining when these unexpected expenses may occur. However, just because you expect to need a new roof in ten years, it may stay almost perfect for 20. If the reserve funds don’t need to be used, they build up. Check the reserve funds, and if there is a lot in there, you may be able to get the board to reduce HOA fees because less money needs to be put in the reserve each month.
You may not find many places to cut spending, but at least you’ll know your fees are not being wasted. If you want to stop spending so much in HOA dues, start today by asking to review the HOA budget.