Housing communities don’t just run themselves, do they? It’s the responsibility of the Homeowners Association (HOA) to keep everything, from landscaping to maintenance and security, functioning smoothly.
However, in the past couple of years, this hasn’t exactly been a smooth ride. Between the third quarter of 2022 and the same period in 2023, the typical homeowner saw their annual maintenance expenses climb by $400, rising from roughly $6,100 to $6,500. That might not sound like a giant leap, but when it’s multiplied across multiple properties, it quickly adds up.
So, how does an HOA deal with this rising tide of expenses? Well, the answer isn’t always in tightening your belt. Instead, you need to explore new, unconventional ways to trim costs while maintaining quality.
Let’s have a look at some creative ideas that could save your HOA money and leave you with more resources for the things that mean more to the community.
Tip #1: Automate Your Financial Operations
Managing an HOA budget can be a full-time job, especially when it comes to bookkeeping. The constant back-and-forth with invoices, payments, and financial reports can be a handful.
That’s why many HOA treasurers consider full-service HOA/COA accounting services to cut down the hassle of day-to-day financial management. The upfront cost of automating bookkeeping might seem like another expense, but the time savings and accuracy improvements really do pay off in the long run.
As rightly pointed out by Ledgerly, ideally, accounting should be tech-backed but human-led. Choose a platform that combines software efficiency with real people who understand community association finances.
Automated payment reminders reduce delinquencies, digital record-keeping simplifies audits, and having professionals handle your books means fewer errors and more transparency. The money saved from avoiding late fees, penalties, and costly mistakes often covers the service cost itself.
Tip #2: Tap Into Bulk Purchasing and Group Discounts
We’ll let you in on a little secret – buying in bulk isn’t just for Costco trips. When it comes to HOA expenses, pooling resources can actually save a lot of money. When multiple communities band together to negotiate with landscapers, pool maintenance companies, or waste management services, vendors often offer substantial discounts for the guaranteed volume.
Regional HOA coalitions exist specifically for this purpose. Your association can join forces with neighboring communities to leverage collective buying power. The same approach works for supplies, too. Ordering mulch, cleaning products, or office materials in bulk throughout the year instead of as needed can drastically cut down expenses.
Some management companies already have these relationships established, so ask what group purchasing programs are available. Even simple things like insurance policies can cost less when bundled with other associations. It takes some coordination upfront, but the annual savings make it worthwhile.
Tip #3: Switch to Solar or Community Energy Programs
We all know how fast energy bills have been climbing lately. Since 2020, residential electricity rates have surged by over 30%, nearly double the rate of inflation. But there’s a way to fight back. Switching to solar energy or joining community energy programs could save your HOA big bucks in the long run.
Solar panels can drastically cut electricity costs, and they’re more affordable than ever, especially with incentives like the Residential Clean Energy Credit, which covers 30% of the cost for qualifying installations through 2032.
If solar isn’t an option for your entire community, look into community solar programs, where homeowners can buy into local solar farms. This allows residents to access solar energy without installing panels on their own properties.
Either option gives your HOA a chance to lower energy bills and take advantage of cost-saving incentives, all while future-proofing your budget.
Tip #4: Switch to Water-Efficient Landscaping
Water bills are climbing across the country. In fact, the median monthly water utility payment jumped 7.1% year-over-year as of March. That’s a sharp increase for something you might not think about every day, but it’s a big deal for HOAs managing shared spaces.
When you’re maintaining large common areas, parks, and green spaces, irrigation costs can eat up a significant chunk of the budget. Switching to drought-resistant plants and native species cuts water usage dramatically without sacrificing curb appeal.
Xeriscaping has come a long way from the rock garden stereotype. Modern designs look lush and inviting while using noticeably less water than traditional lawns. Installing smart irrigation systems that adjust based on weather conditions prevents overwatering.
Some communities are replacing grass altogether in low-traffic areas with ground cover or decorative gravel. The transition costs get recovered surprisingly fast, usually within a couple of years. Plus, water-efficient landscapes require less mowing and fertilizing, which consequently means lower maintenance contracts.
Tip #5: Reassess Your Reserve Fund Strategy
Special assessments are nobody’s favorite surprise. When a major repair comes up and there’s no money set aside, boards get stuck asking residents for hundreds or thousands of dollars on short notice.
People push back, payments get delayed, and suddenly you’re managing angry neighbors while scrambling for emergency loans. The tricky part is that only twelve states actually require HOAs to maintain cash reserves, so most communities operate without any legal mandate to save.
That doesn’t make it any less necessary, though. We suggest setting aside at least 10% of your annual budget specifically for long-term capital expenses. More, if possible. Commissioning a reserve study every few years identifies what big-ticket items need replacement and when.
Knowing the pool heater has maybe three years left means you can plan ahead instead of reacting in crisis mode. Yes, it requires slightly higher monthly assessments now, but it beats hitting everyone with surprise bills later.
Baby Steps, Big Savings
At the end of the day, managing an HOA budget doesn’t have to feel like a never-ending uphill climb. With a bit of creativity, intelligent planning, and the right tools, you can keep costs down and improve your community. Start with one tip, and watch how small changes make a big difference. Here’s to a future of more savings, less stress, and a healthier bottom line for your HOA!
