HOA stands for Homeowner’s Association for homeowners who own both lots and homes. It essentially governs and manages regulations for a particular residential community. Aside from that, it also manages and maintains common recreational areas including playgrounds or pools. You as a homeowner can be an automatic member, depending on the community’s specific guidelines. Homeowners follow regulations that range from landscape upkeep to permitted outdoor decorations. Any alterations to a property must be approved by the Board of Directors.
HOAs have an objective of maintaining community standards and upkeep, which makes them able to have a high resale value. The HOA fees are collected by an association on a regular basis. This money goes into the maintenance of common areas. A part of these funds also goes into replacement and upgrades of community facilities as needed.
HOW CAN YOUR HOA MAKE EXTRA MONEY?
At times, the expenses of an HOA can exceed the amount that is brought in by monthly HOA fees. As a result, residents can be hit with special assessments, which can be a shock to homeowners and a large blow to community morale.
However, if your HOA board is hardworking and creative, it can find many ways to bring in HOA extra income without unduly burdening homeowners.
1. RENT OUT YOUR CLUBHOUSE
If you have a clubhouse, it can be a great asset for bringing in extra funds to your homeowner’s association. The clubhouse can be used for birthday parties, business meetings, baby showers, fundraisers, and many other events. If you are not doing it already, consider making the clubhouse available for rentals. Sit down with your fellow board members and HOA manager to discuss a reasonable pricing matrix. Most of all, make sure to notify all homeowners of the clubhouse’s availability.
2. ADVERTISE IN YOUR NEWSLETTER
Your monthly newsletter can be a great way to bring in a little extra money each month. Reach out to local businesses and offer the space to them for advertisement.
Businesses can pay your HOA for space in which to put advertisements or coupons and can, in turn, grow their customer base. This is also a good way to introduce your residents to local businesses in the area. Although this might not bring in big bucks, it is still a great method if you want consistent HOA additional income.
3. ALLOW A CELLULAR TOWER
If there are any unused roofs in your community, consider a cellular tower. There are both pros and cons to allowing a cellular tower on unused roof space. One of the pros, however, is having a little extra cash each month.
It can bring up to $3,000 a month to your association, which is no small amount. In addition to the rental fee, your HOA can benefit by having superior cell service on your property.
4. USE YOUR SURROUNDING ENVIRONMENT
Take a moment to consider the natural area around your community. Try to think of ways that you can utilize the space that you often take for granted to make HOA additional revenue.
Do you have a hill that can be opened for community sledding? Are there any rivers or lakes that can be used for rafting or fishing? Is there a nice plot of land that can be rented out to the community or residents for a community garden? Do not let these natural features go to waste.
5. THINK ABOUT STORAGE, PARKING SPACES, AND OTHER UNDERUSED AREAS
If there are spaces in your community that are currently going unused such as a parking area or empty buildings or sheds, it is time to think about how these areas can be used to start generating income.
Transform empty buildings into storage units that can be used by residents or anyone in the community. Rent out parking spaces, and see if there are any indoor areas that can be rented out by teachers for fitness or art classes. Get creative with the use of spaces in your association.
6. MAKE USE OF OUTSIDE VENDORS (OR VENDING MACHINES)
How else can an HOA make extra money? By inviting outside vendors into the community — for a fee. Vendors are usually willing to pay a fee to use the facilities your association provides. The best part is, that this is a win-win for everybody involved.
Vendors get to sell their services or products, residents get convenient access to these products and services, and the HOA can make extra cash. There are endless possibilities for the types of vendors you can invite in — from mobile pet groomers to mobile markets.
7. TAKE A GREEN APPROACH
Going green is not only beneficial to the planet, but it can also be a great way to save money in your HOA. For instance, by recycling your trash, you can cut back on how often to schedule trash collection services. You can also go paperless by transitioning to a digital platform for communication, dues collection, and the like. By doing so, you can save money on paper and printing.
8. CUT COSTS
It is not something all associations want to consider. However, if there are no other options, your board may want to cut costs. Instead of boosting revenue by getting more cash inflow, you can do it by saving up on expenses.
Take a good look at your current budget and assess which ones are absolutely necessary. Perhaps you can cut back on the frequency of certain services. When taking this route, though, it is important to do so without sacrificing the property values of the community.
9. CHARGE AN AMENITIES FEE
Although not a particularly popular option among residents, your association can charge an amenities fee on top of the usual HOA fee. Just like HOA fees, you can charge amenities fees on a monthly or yearly basis.
This method works well for communities with existing amenities, like pools and fitness centers, because it involves little to no expenses on the HOA’s part. The amenities fee can go into maintenance and general upkeep. It can also go into potential upgrades in the future.
10. ORGANIZE FUNDRAISERS
Raising dues or levying special assessments likely won’t get you the popular vote among owners. If you need another way to make extra money, consider holding a fundraising event or two.
Fundraisers are great because they are fun and allow people to mingle with each other. There are so many options to choose from, too. Plus, owners are probably going to respond more to an event where they can willingly donate money instead of a mandatory assessment.
When planning your event, remember to take your target demographic into account. Great fundraising ideas include small concerts, bake sales, workshops, and auctions.