Budgeting can be difficult and time-consuming. You have to analyze a lot of documents and calculate, and recalculate every single expense, and check your total is right ten times. It’s essential to get everything right, a bad budget can cause a lot of problems. After researching for our budget article we started wondering how we at Vinteum can make property managers’ lives easier and reduce the hassle of budgeting. We decided that the best tool to help with this problem was a smart HOA calculator.
It would be the best way to make property managers’ and board of directors’ lives just that little bit easier. If you calculated each month how much you had spent, and how much the HOA made, then at the end of the year you could look back and quickly see if you had managed to stay within your budget. If you didn’t, then why not? Did you have to spend a lot of money on something unexpected or had the money been mismanaged? This makes it easier to know if you need to adjust your budget or if it was something out of your control.
So we created an HOA calculator so that you can calculate how much you’re spending on fixed expenses, variable expenses, and any extra expenses your HOA might incur. It automatically calculates the total for each section, then removes a percentage for savings and money needed for your reserve fund before telling you your total expenses. You then include the income the HOA receives, and it calculates the total income. Finally, you have a grand total. This saves you working everything out yourself, and you can quickly see each month’s spending and earning. Simply duplicate the sheet and you can calculate every month to make your yearly budget simple, or do it per year. We’ve also including graphs so you can see the percentage of your money you allocate to each service.
This saves a lot of time that you would have spent finding everything all your financial statements. If you store financial documents on the cloud (eg Google Drive, OneDrive or Neigbrs documents feature) you could hyperlink the grand total or specific numbers in the spreadsheet to a financial statement. That way you have the information at your fingertips when you need it. To create an HOA budget you also need to analyze one or two past budgets.
You should also check your HOA to see what will need repair and maintenance factored into the budget. Call your contractor or engineer to make sure that you leave no stone unturned. Pay attention to Neigbrs service requests as well, as residents may have noticed something you haven’t. Next, contact utility providers and see if their prices are going to increase, and by how much so you can factor this into the budget. Their prices increase steadily, so it’s not wise to assume they’ll stay the same price as last year. You should also check your contracts with cleaning companies, landscapers, roof consultants, etc to make sure you’re getting the best service at a reasonable price. If you’re not satisfied, you should renegotiate or end the contract. You should also call them to check that their prices aren’t going to increase.
In the HOA calculator, you’ll see that there is a line for preferred reserve. We’ve put in 20% because you should always try to save 20% of your yearly budget for unforeseen maintenance, possibly caused by natural disasters, or fires, etc. With 20% set aside in your reserve fund or account, you are always prepared, and won’t need to increase HOA fees. An increase in fees never goes down well so it’s better to have some money saved for any eventuality. However, you can adjust this amount to reflect the amount that your association normally puts aside in the reserve for any emergencies.
In the calculator’s second sheet you can break down your reserve fund item by item. Be sure to include the capital expenditure, the item’s lifetime in years, and how many years ago the item was last repaired or replaced. The HOA calculator then automatically works out the savings per item and the total savings per year. It also calculates the total reserve per item, and the grand total which is automatically included in the expenses total in the overview. This ensures you never forget when you need to do major repairs and upkeep, and you’re always saving for them.
The HOA calculator is Vinteum’s newest tool to make the lives of the board of directors, and property managers easier. When you run more than one community it’s essential that you have tools that do work for you quickly and efficiently so you can focus on managing your communities. While administrative tasks are essential, they don’t need to be time-consuming. Vinteum’s goal is to make your life easy.
Download the HOA calculator HERE!