Why Now is the Perfect Time to Review the Budget for Your HOA/COA
A homeowners’ association (HOA) budget is more than just numbers on a page, it’s the financial plan that keeps the community running smoothly, preserves property values, and ensures residents enjoy a safe, well-maintained neighborhood. But like any plan, it works best when reviewed and adjusted regularly. That’s why now is the perfect time for your board to take a closer look at the association’s budget.
Stay Ahead of Rising Costs
Inflation, changing vendor rates, and utility increases can all affect the association’s bottom line. By reviewing the budget now, boards can spot where expenses are trending higher than expected and make necessary adjustments. Being proactive prevents end-of-year shortfalls and helps the board avoid scrambling to cover unexpected costs. Currently insurance is a topic of concern, especially for communities built in the 1960s or 1970s. Premiums have risen across the board and if insurance hasn't been re-evaluated, you could see savings should you reach out to an insurance broker.
Vendor Performance
Additionally, how are vendors performing? Vendors need feedback. If there are concerns from the community about the quality of work, it's a great time to initiate the conversation in a positive and constructive manner. Ask if prices will remain steady for next year, and identify concerns with service asking how, from their perspective, those concerns can best be addressed. Board members can learn a lot about the different components that contribute to each vendor's costs.
Strengthen Reserve Planning
One of the most important parts of any HOA budget is the reserve fund, money set aside for major repairs and replacements. Roofs, paving, mechanical systems, and other long-term assets eventually wear out. If reserves aren’t adequately funded, the association may be forced to levy a costly special assessment. Reviewing the budget gives the board the opportunity to evaluate current reserve contributions, update or schedule a reserve study, and ensure that the community is financially prepared for the future. Ultimately, here at PMI Service Group we view the reserve budget/study as a living thing. As time passes, expenditures and property conditions can change. It's best to review the long term plan every quarter.
Increase Transparency and Homeowner Trust
A budget review also supports good communication between the board and homeowners. When residents see that the board is carefully monitoring income and expenses, it reinforces trust and demonstrates responsible stewardship of association funds. Clear updates about how money is being allocated, whether for landscaping, maintenance, or reserve savings, help owners understand where their assessments are going. If your board has employed a HOA Community Manager, make sure you are getting financial reports that enable you to do a proper assessment of the accounts. The information should contain at minimum income and balance statements, reconciliation, vendor invoices and bank statements. These items are very easy to produce and should be offered.
Plan for Projects and Improvements
Budget reviews aren’t just about cutting costs. They’re also about making sure the community has the resources to invest in projects that improve quality of life and property values. Whether it’s upgrading common areas, adding amenities, or improving technology for management, reviewing the budget now ensures these priorities can be funded responsibly. For large or small communities, keep in mind a homeowner's association is a volunteer effort and owners can contribute. Some maintenance items that don't require special skills or tools can be a community effort. Items such as gardening, planting, tree/bush trimming, sealcoating, painting fences, small handyman type repairs, etc. can be made into a checklist and distributed for community volunteers. Organize an Association-sponsored picnic. Residents can attend, bbq some bratwurst or burgers and volunteer to help tackle some of the "to-do" list prepared by the board. Most communities have able-bodied individuals, some with tools or work in the trades, and a weekend afternoon can really help a community bond and make improvements.
Avoid Last-Minute Decisions
Finally, reviewing the budget before the next fiscal year gives boards the time to make thoughtful choices. Instead of rushing through budget approval in the fall or at year’s end, the board can explore options like renegotiating contracts, seeking competitive bids, or spreading out costs in a way that minimizes impact on homeowners.
The Bottom Line
A timely budget review and creative thinking by the board or community manager is one of the smartest steps an HOA can take. It ensures financial stability, strengthens reserves, builds homeowner trust, and keeps the community on track for long-term success. Taking the time now can prevent costly surprises later, and that’s good for every homeowner.
About PMI Service Group
PMI Service Group is a full-service property management firm. We operate in rental management for residential single-family, townhome or condos as well as commercial property management as well. If your HOA/COA is struggling to get good support from your management company, or you are currently self-managed and would like to explore options, please reach out. We would love to have a conversation. 630-912-8742
