Creating a successful property management budget can be a challenge — especially in times of economic uncertainty. As you sit down to evaluate your budget, you might be overwhelmed by questions surrounding costs, expenses, fees, investments, and financial goals.
Where should you allot a generous budget, and where should you cut back? How much does it cost to hire a property manager? Should you outsource preventative maintenance or keep it in-house?
If you’re struggling with how to prioritize your budget, we can help. Check out our list of the top property management categories to budget for in 2022.
1. Property Management Platform
If you’re seeking a better way to predict income and expenses, meet financial goals, and become more efficient, a property management platform is an invaluable tool to add to your belt.
Innovative property management solutions offer features that help you save time and reduce errors in every facet of property management, including:
- Record-keeping and administration
- Concierge services
- Resident experience
- IoT sensor solutions
- And more
2. Fund Reserve
There are some states, provinces, or HOA bylaws that require an annual reserve fund analysis. Every year, your HOA's reserve fund should be reviewed and replenished, regardless of whether it's mandated.
HOA reserve funds are set aside by community associations to cover major component upgrades and future replacements and repairs that do not happen annually. It is ideal to maintain a 20% reserve fund in case expensive repairs arise. At the very least, ensure that HOA insurance policy deductibles are covered.
3. Vendor Services
Keeping an eye on vendor contracts and adjusting the budget for any increases in costs is always a good idea. The board should also consider negotiating rates and requesting updated insurance information from current vendors at this time.
If you're trying to save the HOA money, you may feel tempted to hire the cheapest vendor. But cheap services can produce cheap, low-quality results. Their low prices are due to compromising on quality and hiring unqualified workers. More often than not, you end up costing the association more when you cut costs in this way.
Board members have a fiduciary duty to spend the association's money responsibly. The best interests of the community must always come first. Spending a little more to get a better vendor is worth it if that means getting a better product.
4. Shared Amenities
Does your property management budget leave room for improving or adding amenities? If not, it should. One of the best ways to engage residents is by boosting your budget for community amenities.
Property-wide amenities are also on the rise, with more multifamily buildings investing in smart access, video intercom systems, secure package access, dog parks, rooftop space, and fitness centers.
Maintaining said amenities can also be costly, and if the use of them is built into your HOA fees, your residents will expect these to be updated regularly.
5. Resident and Public Parking
Property management budgets for outdoor amenities have increased significantly over the past two years, with covered parking being one of the top investments. Easy access to parking allows you to run a better building by drawing more residents to your community and improving their experience.
But it can also lead to increased time spent on parking management, which is why it’s important to have an adequate budget set aside for this community expense. When creating your parking plan, be sure to include a budget for these essential parking features:
- Parking permits: Modern property management solutions allow residents to create and process their own visitor permits for guests, which decreases administrative tasks and saves you time and resources.
- Parking enforcement: It would be a mistake to invest in community parking without also investing in parking enforcement. Use parking decals to regulate authorized vs. unauthorized parking, and hire a tow company and parking team to enforce rules.
- Paid parking: Paid guest parking is a great way to earn revenue and increase the profitability of your property. You can also offer premium parking spaces for residents who are willing to pay more for the most convenient parking spots.
Manage Your Budget with BuildingLink
Taking time to create a detailed property management budget will give you greater control over your building’s finances and future spending. You’ll have a better metric to measure your goals and have greater insight to make financial decisions.
If you’re looking for more ways to run your building better, smarter, and faster, BuildingLink can help. As the industry’s most trusted property management software, BuildingLink allows you to deliver a superior resident experience, streamline maintenance and operations, and gain visibility of your property management budget.
Contact us to learn more today.