Often condo associations and HOAs get in trouble with their cash flow management because either they are spending too much or association members are not paying their HOA dues on time or not at all. Here are some practical ideas to increase HOA cash flow.
Reduce Condo Association or HOA Spending
- Take a close look at the budget. Are there service and maintenance items your HOA 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 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, 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 Bank Loan or Line of Credit
Whereas a HOA bank loan will provide an association with a one time lump sum, a HOA bank line of credit can be used by an association to draw down on during times of cash flow issues. The HOA or Condo Association receives a check book from the association bank and can use the checks for whatever purposes the association sees fit. Every HOA and Condo Association should have an association line of credit in place for future use.
HOA assessments are the most common and traditional ways to increase cash flow. Unless an 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 HOA Fees You Can't Collect On
An option to sending your HOA collections to a lawyer is to sell the debt to a 3rd party purchaser at a discount who will then try to collect on the debt themselves at a small profit. This will get you 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 association dues 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.