HOA Budget Best Practices
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WHEN IT COMES TO CREATING A BUDGET, THE BEST APPROACH IS ESTABLISHING A 1, 3, AND 5-YEAR FINANCIAL PLAN. IT ALLOWS IDENTIFYING LARGE PROJECTS TO FORESEE THE FUNDS IN THE NEXT PERIOD.
WHEN BUDGETING, HOAS MEMBERS MUST REVIEW CURRENT AGREEMENTS TO SEE IF SOME VENDOR IS PLANNING TO INCREASE FEES INCREASES OR CHANGE THE TERMS OF THE SERVICES.
CONSERVATIVE PLANNING THE ECONOMY CHANGES CONSTANTLY AND IS UNPREDICTABLE. IT MEANS THAT SERVICE COSTS AND CONTRACTS ARE SUBJECTED TO IT. THEN, IT IS RECOMMENDED TO BASE INCOME ON ASSESSMENT AND AVOID ESTIMATIONS THAT TEND TO BE SPECULATIVE. ON THE OTHER HAND, HOAS MEMBERS SHOULD AVOID PREDICTING THE ECONOMY; IN THIS SENSE, THEY MUST ADJUST THE ASSOCIATION’S COST PROJECTIONS BASED ON TODAY’S ECONOMIC CONDITIONS.
THE HOMEOWNERS ASSOCIATION MUST BE PREPARED TO DEAL WITH ANY CONTINGENCY. AN UNPREDICTABLE SITUATION MAY SUDDENLY BE A SERIOUS PROBLEM WITHIN A COMMUNITY. A HURRICANE, FLOOD, OR ANY DISASTER CAN DISTURB THE SAFETY OF THE FAMILIES WHO LIVE IN IT. FOR THIS REASON, WHEN PLANNING THE BUDGET, IT IS RECOMMENDED TO CHECK INSURANCES TO PROTECT THE COMMUNITY AGAINST CERTAIN EVENTUALITIES.
INSURANCE Presentations are communication tools that can be used as demonstrations, lectures, speeches, reports, and more.
HOAs’ budgets are based on prior budgets. Hence, the best is to keep track of all of the prior years’ operations in the current budget draft. It allows applying averages to determine the budget. On the other hand, it is advisable to construct some budget categories from zero each year and justify all expenses when creating the budget.
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