Homes, cars, and communities all have a couple of things in common — they evolve and require a lot of planning for the maintenance and repairs needed as they age. In the first couple of years, there will likely be very few problems, then there may be minor maintenance and upkeep, but as the years drag on, you’ll likely face more extensive repairs. Planning for the longevity of your community and HOA will ensure you have the necessary funds and resources to take care of problems as they arise.
What is an aging community?
An aging community is any community that has been around for over a decade. The community has had 10 years of wear and tear and is likely to show the effects of years of use. It’s generally closer to that twenty year mark that communities may need to tackle some larger improvements and repairs.
Fully funded reserve funds are key.
Even if your HOA has regular check-ups and maintenance, the community will have things that need to be fully replaced, redone, and revamped. In order to take on these bigger projects, you need to make sure that there are sufficient funds in your reserve account. Update your reserves regularly.
Have a strategy and vision in place.
Where does your community want to be in a few years? What can the HOA board do now to ensure that you meet those goals down the line? Having a strategy and a plan for the community will help you understand how funds should be spent and the actions that need to be taken.
Weigh the short and long-term needs.
There are two teams that HOAs often fall into: 1) Boards that are financially sound enough to accurately estimate the reserve funds needed to maintain an association long-term and 2) Boards that don’t accurately estimate the future needs of the association, put enough funds in reserve for maintenance, or charge less than what’s needed in HOA dues.
Annual budgets should be made carefully.
When preparing annual budgets, keep in mind that maintenance costs will increase. Make sure there’s an adequate amount in the budget to avoid special assessments and sudden large hikes in dues along the way.
Managing an aging community comes with struggles, but with a strategy and a plan for the future, the HOA board can create a sustainable and welcoming neighborhood that everyone will love to call home. If you need help managing your aging community, contact Prism Realty Management. Give us a call at 512-676-5842 — we’d be happy to talk to you about who we are, the services we offer, and our process.