Often condo associations and HOAs get in trouble with their cash flow management because either they are spending too much or condo association members are not paying their condo fees or HOA fees on time or not at all, sometime resulting in default. Here are some practical ideas to increase cash flow.
Reduce Condo Association or HOA Spending
- Take a close look at the HOA budget. Are there service and maintenance items your HOA or condo association can due with out? Maybe there are services that can be performed once per quarter instead of every month or semi-annually instead of quarterly.
- When was the last time your HOA or condo association negotiated with your vendors or service providers? If your HOA uses a property management company, they should be doing this for you. If your HOA is self-managed, have the condo board go out and get competitive bids and bring them back to your current service provider so they have the opportunity to lower their price for you.
HOA Loans or Condo Association Loans and HOA Credit
Whereas a HOA loans or condo association loans will provide a condo association with a one time lump sum, a HOA credit line can be used by a condo association to draw down on during times of cash flow issues. The HOA or Condo Association receives a check book from the condo association loan provider and can use the checks for whatever purposes the condo association sees fit. Every HOA and Condo Association should have a HOA credit line or condo association credit line in place for future use.
HOA Assessment
HOA assessments and condo association assessments are the most common and traditional ways to increase cash flow next to raising condo fees. Unless a condo association credit line is in place, assessments are typically the best way to get a condo association cash quickly, although it can often be painful to condo owners.
Sell Your Condo Fees You Can't Collect On
An option to sending your HOA collections to a lawyer is to sell the condo fee debt to a 3rd party purchaser at a discount who will then try to collect on the debt themselves at a small profit before a condo unit gets into default. This will get the condo association needed cash much quicker and easier than going the legal route.
Have Your HOA Consider an Automated Pay Solution
Your Condo Association or HOA can receive condo association fees via Bank Account Debiting or Credit Card Payments. 3rd Party payment companies charge a transaction fee and handling fee. This could help your HOA to get paid quicker.
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