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Better HOA Builder Budgets
by Richard Thompson
Long before ground is broken, the HOA developer is faced with a variety of decisions over building and landscaping styles, materials and systems. While price point and marketing considerations play a heavy hand in those decisions, an aspect oft-overlooked is the HOA Factor. The HOA Factor is the maintenance and costs required to run the HOA operation after turnover. Careful consideration of the HOA Factor benefits both the developer and the HOA. If the developer considers the long-range impact of construction decisions, homeowner fees can be significantly reduced. Lower fees means buyers can qualify for bigger loans. Bigger loans mean bigger profit. Consider some of the alternatives available that can make this dream a reality: Building Components Compact Fluorescent Lighting Fixtures. These jewels provide a variety of benefits: higher light levels for security, reduced energy consumption to save electricity and last 10 times longer than incandescent bulbs thereby reducing labor costs. Roofing. 40- and 50-year shingles are now available for little more cost than 25-year products. Extending the useful life by 60 to 100 percent drastically reduces reserve requirements on one of the HOA's biggest expenses. Pool & Spa Equipment Automatic Chlorinator. A great improvement for stabilizing the pool chemistry and reducing labor costs. Solar Blanket. Reduce heating costs up to 25 percent. Solar Heating Panels. In sun-friendly states, solar panels can reduce heating costs by 50 to 75 percent and pay back their investment within a few years. System Computer. Permits automatic adjustments otherwise required by hand. One year payback. Extends useful life of pool and its components. Paint Color Selection. While darker designer colors are tempting to the marketing folks, light colors reflect heat and are less prone to fading and cracking, extend the repaint cycle and reduce reserve costs. Siding Selection. There are many choices of siding. But two, cementaceous (like Hardiplank) and vinyl afford some great cost and maintenance advantages. Both have a 50-year manufacturer's warranty. Cementaceous siding holds paint better and longer and it is fireproof. Vinyl requires no paint at all and eliminates the most frequent and expensive repair an HOA generally faces. Both come in a variety of architecture styles which, when creatively used, will enhance market values. Playground Equipment. New-generation equipment offering powder coated steel construction in attractive colors offer low maintenance, greater safety and longer life. Sprinkler System with Rain Override. Ever drive by a property in a driving rain only to see the sprinkler system faithfully chugging away? The inexpensive addition of a rain override device ensures water is not wasted. Deck Materials. The average wood deck lasts 15 to 20 years. Competitively priced recycled material like Trex Deck has a reputed 50-year life and requires neither sealing, stain or paint. Fencing Selection. If the main objective for fencing is privacy and curb appeal, vinyl fencing offers both in a 50-year-life product for less money than a wood fence. Landscaping Components Native Species. When designing the landscape layout, insist on using disease and drought tolerant native species. They will last longer and save on water. Xeriscaping. This landscape design technique reduces water needs by careful selection of plants and construction design. Reduce Turf Area. Grass looks nice but is maintenance and water intensive. Limiting the area is a budget bonus. Signage. Rather than wood signage, consider a sandblasted rock monument. The pricing is competitive, it lasts forever and won't get stolen. Cost & Maintenance Management Operating Budget. Rather than cobbling together some numbers, have your budget done by an experienced HOA manager or consultant who isn't bidding the management contract. The line items will reflect reality. Reserve Plan. A Reserve Plan (or Study) is the most important long-range planning tool available. It considers all the periodic repairs and replacements the HOA will be faced with over, usually, the next 30 years. It is an indispensable roadmap for the Board to follow and provides a funding plan so money can be accumulated systematically. If the developer chooses building and landscaping components according to these recommendations, owner contributions will be substantially reduced. Maintenance Plan. Knowing how and when to repair or replace something is just as critical as to know what components to include. A good maintenance plan instructs on both regular operating maintenance and reserve repairs and replacements. Besides excelling at sticks and bricks, developers that hone their HOA budget and maintenance skills will increase their profit margin and client satisfaction. Make money and make happy? Who woulda thunk it? | 
