Are you getting ready to move into a new condo complex or neighborhood? If so, it is possible that you may have to pay regular homeowners association fees (or HOA fees) to live in that area.
On average HOA fees cost about $200 per month. They can be as high as $700 per month in certain locations, though.
Do you want to live in a specific place without having to spend a fortune on these homeowners association fees each month? If so, we're here to help. Read on for some tips that will help you lower your HOA fees.
What Do Homeowners Association Fees Cover?
Many people are resistant to the idea of paying HOA fees because they're aren't sure what they're getting in exchange for their hard-earned money. The specifics vary from place to place, but, in general, your HOA fees help to cover the following:
- Building maintenance expenses (e.g., landscaping, improving swimming pools, improving shared areas like lobbies, patios, and elevators)
- Major repairs (e.g., new roofs, new elevators, etc.)
- Maintenance of common amenities (e.g., tennis courts, clubhouses, neighborhood parks)
How to Lower HOA Fees
It's obvious that you need to pay your HOA fees if you want to continue living in a particular place (and if you want to avoid making enemies of your neighbors). The good news, though, is that there are a lot of steps you can take to avoid paying excessive HOA fees. Here are some tips that will help you save money:
Review the HOA Budget
A good first step to take is to ask to see a copy of the HOA's budget. This gives you a chance to see how the HOA is spending your money (and your neighbors' money).
When you review the budget, look for ways in which the HOA might be spending more money than is necessary. Then, propose solutions to help them cut these costs and, in turn, reduce the amount of money you need to pay in fees each month.
Join the Board
In many cases, the HOA might not be particularly eager for you to review their budget. To combat this problem, consider joining the HOA board yourself. They have elections annually so if you can garner enough support then you will win a seat on the HOA board. If there is a question about the homeowners association election legitimacy, you can always hire an inspector of HOA elections to get the truth of the results.
This will give you access to their budget, as well as more information on their spending. For example, you'll get to review contracts for various vendors to see if there is room to reduce spending anywhere and lower HOA fees as a result.
Review HOA Contracts
Speaking of contracts, one of the first actions you should take once you join the HOA is to review their contracts. Look at the agreements they've made with vendors for things like landscaping and pool maintenance.
Pay special attention to how much they're paying each month. Then, do some research on your own to see if there are more affordable options in the area that they're not utilizing. Convincing the members of the HOA to switch vendors can save them money and lead to lower fees for you and the rest of the members of the community.
Consider Reducing Maintenance Frequency
If there aren't any other maintenance providers that your HOA can hire to keep the community in good shape, you may want to talk to your fellow HOA members about reducing maintenance frequency. Remember, this doesn't have to mean taking drastic measures like eliminating lawncare altogether.
You might be able to get the members on board with reducing it to once a week instead of twice a week, though. The area will still look nice and well-kept, but you'll get to cut your maintenance costs in half.
Review Insurance Premiums
Another place where your HOA might be spending more money than is necessary is on their insurance policy. This is often one of the biggest expenses for HOAs, after all.
Ask to see a copy of their latest policy and compare its premiums to the premiums offered by other insurance companies. With a bit of comparison, you might be able to save your HOA hundreds or even thousands of dollars.
In this situation, everyone wins. The HOA gets to save money and so do the members of the community.
Defer Non-Essential Maintenance
Perhaps your HOA has been planning a big maintenance project that might be nice but isn't necessary. If you think you're HOA fees are too high, consider talking to them about deferring this project until you've reduced costs elsewhere or reassessed your budget.
Some members might not like the idea of putting off a project. If you can get the majority of people on your side, though, this could lead to significant savings.
Reduce Existing Reserves
Often, HOAs have a reserve set aside to cover unexpected expenses. Take a look at these reserves and consider how much money has built up in them over time.
If it seems like a lot, you might want to talk to your fellow HOA members about using the reserves to cover some expenses and lowering fees for residents. Depending on how much is in the reserves, this might be something people are interested in doing.
Reduce Property Management Fees
Finally, consider talking to your HOA management or property management company about reducing fees. Sometimes, the high HOA fees aren't because of the HOA's decisions, but rather the decisions of higher-ups.
Talking to the management team about lowering their fees can be a useful step. It often takes a lot of negotiating, though, so be prepared to haggle for an HOA fee reduction.
Save on HOA Fees Today
As you can see, there are quite a few tips and tricks that can help you to reduce your homeowners association fees. Give one (or more) of these options a try today to see how they affect your HOA and monthly budget.
Do you need more advice on saving money, perhaps so you can invest it in a new business or startup venture? If so, we've got lots of great advice available in the Finance section of our website. Check it out today and also visit our Real Estate section!
