As the 2012 federal legislative fiasco over the debt ceiling—as well as any number of other spending bills proposed since then—demonstrated, balancing a budget can be like pulling teeth. Balancing a condo or HOA community's budget can sometimes seem just as arduous—the task can be incredibly difficult because there are so many moving parts. Making sure that a building or association isn’t wasting money is even harder but budgeting is a necessary part of running and managing a building community.
In the case of a condo or an HOA, cutting costs is one sure way to bring a runaway budget under control but cost-cutting comes with, well, costs. Cut too deep, and not only may a board’s trustees face backlash from residents if services and amenities are reduced, but they may find themselves in an even tougher spot if maintenance issues are left unaddressed and lead to bigger expenses down the road.
There are ways that HOA administrators can reduce waste and save money without neglecting necessary maintenance and services, however—it's just a matter of working smarter and consulting the right professionals.
“HOA administrators probably waste the most money on indecision and the inability to make a decision,” says Nicholas Boit, president of Barrington Management in Arlington, Massachusetts. “When a property wastes money it’s not just through utilities or not using energy-efficient light bulbs. Things that can be wasteful are not being efficient with the time of the management company and the time of the board, which is usually caused by indecision on the part of the board. This tends to lengthen the process of getting things done and that translates into costing money.”
“We have seen communities with under 80 units that have full-time site superintendents or other staff save money by outsourcing those duties,” says Patty Coleman, new business developer for Condo-Financials.com and Pyramid Real Estate Group in Stamford, Connecticut. “The cost of pay, benefits, insurances, etc. is relatively high while many communities complain about keeping the person busy or managing them. By choosing a vendor to do these routine services you can save significantly and also the association doesn’t have to worry about vacation coverage or managing daily tasks, as there is a layer of built-in management by the vendor’s supervisors.”