Now that we have entered into 2024 and the budgets are set, associations are undoubtedly looking for ways to save money and put larger amounts of money into the reserves. Here are 10 ways to help you accomplish these goals.
1. Reduce energy consumption: Utility prices have risen considerably over the last few years. As a result, a great way to slash common area expenses is to cut back on consumption of electricity, water and gas.
- Switch to LED lighting: LED lights are 85% more efficient than incandescent bulbs and 10% more efficient than compact fluorescent bulbs. They are also long-lasting and require low or no maintenance.
- Install motion detection sensors in the common areas to reduce electricity usage.
- Upgrade your common area hot water tank or replace your air handler or boiler heating system to more efficient ones. These upgrades cost money upfront but can save thousands of dollars a year once they are paid off.
- Install smart water saver devices for the association irrigation system and inside all the units within the association.
- Ensure there are no leaking or running toilets. This can save the association thousands of dollars a year.
- Install drought resistant plants in the landscaping areas that will require less watering during the summer months.
2. Renegotiate service contracts: This is one of the easiest ways to slash expenses. Contact all your contract service providers such as landscaping, janitorial, waste and snow removal and ask them to send new 3 year agreements with the understanding that the new prices will be lower than the current amount the association is paying. The contract service providers benefit as well as they get new agreements that ensure they retain the associations for several more years to come.
3. Review insurance policies: Insurance is one of the largest expenses for community associations. Review your association’s insurance policies to ensure that you’re getting the best coverage at the best price. Ask your broker to bid out the policy to other carriers. Contact a new broker and see if they can bid out the policy to other carriers that your current broker does not
have relationships with.
4. Consider alternative revenue streams: Does your association have a wall suitable for an advertisement sign? Does the association have a community room or a meeting room that can be rented out to generate additional income? Do you have a lobby or other area suitable for installing vending machines to generate additional revenue? Install monitors or kiosks inside the lobbies that provide advertisement and generate extra revenue for the association.
5. Reduce legal expenses: Consider hiring an attorney on a retainer basis to reduce legal expenses. Alternatively, if you don’t need a lot of legal support and you are paying a monthly legal fee, cancel the legal services agreement to save thousands a year.
6. Hire/Upgrade your management company: Are you self-managed? Consider hiring a management company that can save you money will simplifying life for all the community homeowners. Make sure you hire a management company that has the latest technology which will maximize cost saving efficiencies for the homeowners and the association.
7. Prevent contamination or overflow of waste containers: One way to cut costs is to educate the homeowners and residents to ensure they don’t overflow the waste containers. Some waste haulers charge over $100 for overflowing containers or for contamination in the recycling containers.
8. Reduce printing costs: Encourage residents to opt for electronic communications instead of printed materials and consider using recycled paper for printed materials.
9. Get a Bank Loan and Save Money: How can getting a bank loan save you money? Very easily. Get a bank loan and complete all the short term and mid term capital projects on your list. With the way prices keep increasing these days, completing your capital projects now versus years from now will undoubtedly save the association tens of thousands of dollars.
10. Negotiate your contracts: Don’t be afraid to ask for a lower price. Whether it is a large-scale project or a smaller scale project, go back to the vendor that the board has selected and ask them to sharpen their pencil. You might be surprised at what they say and do. You have nothing to lose and only to gain by asking. As the bible says, ask and you shall receive.
Conclusion
There are many ways to save money and slash expenses for community associations. The best way to start is to start today. Hire a new management company. Upgrade your management company. Renegotiate contracts. These are tasks that do take time but if you distribute the work load to all the board members, it won’t feel so overwhelming and it will pay major dividends in the end.
About Chicago Property Services
Chicago Property Services is Chicagoland’s leading provider of community
management services for small to mid-sized condo, townhome, and homeowner associations as well as cooperatives.
To request a management quote or to request a copy of the 2024 board planning guide, please email Salvatore at ssciacca@chicagopropertyservices.com or call him at 312.455.0107 x102.