One of the most challenging components of HOA management is in raising funds. While homeowners want their common areas taken care of and their rules enforced, they rarely want to spend the money required to actually do these things. HOA management companies may occasionally need to get a little creative to fund big projects such as road repairs and street lamps.
1. Always Project in Advance
Many issues arise when an HOA management company has to suddenly increase their fees. If a road will need to be repaired in five years, most homeowners will find it far more palatable to see a gradual increase in fees over five years rather than a huge increase over a single year. Project in advance regarding the costs that will come up within the next five to ten years and increase fees accordingly.
2. Enforce Rules and Fines
While fines and other fees may appear to be minimal, they can still add up. By enforcing rules and fines, you can create a buffer of income that can be used for sporadic required repairs, such as cracked sidewalks. And, of course, actually enforcing the rules and fines will increase the appearance of the neighborhood overall. Many homeowners will ultimately pay off their fees in escrow even if they disagree with them, as otherwise it can hold up their transaction.
3. Hire a Collection Company
Sometimes it's the process of actually collecting fees that can be difficult. Many homeowners may not pay on time or may not pay at all. Hiring a collection company makes this much easier. Collections companies don't take a significant percentage of the collectibles but are far more efficient and effective at actually collecting the debt.
4. Make It Easier to Pay
ACH payments are an excellent way to bring in money. By signing up homeowners for ACH payments, you can be certain to bring in a certain amount of money every month and spend less time in administrative overhead. Credit card payments are similar. The less processing you need, the better.
Of course, there are some times when you may need to send an emergency mailer out to the homeowners regarding funds that need to be paid in immediately. Unfortunately, there's no easy way to do this—it's just something an HOA management company must occasionally do. To make it a little easier for homeowners to understand, it's usually a good idea to include as much information as possible, including hard numbers. Talk to places like The Noble Company of South Carolina, LLC for more information.