An Unexpected Strategy to Maximize Your Association's Budget

Managing the budget of a condo, co-op, high-rise, or homeowners' association is a critical task for any board member. It's likely that you've explored numerous strategies to cut costs and secure the best deals while ensuring high-quality service.

Imagine saving even more than a few hundred dollars—perhaps upwards of $25,000 annually on vendor contracts, or even hundreds of thousands on landscaping expenses. This is achievable, as demonstrated by several associations across North America. Despite their various sizes and property types, these communities achieved significant financial savings through a common approach: partnering with a property management company.

For communities that self-manage, employing a property management firm might appear as an extra expense. However, the figures indicate that potential savings can far outweigh the initial costs. If you're already working with a management company but feel the return is inadequate, discover how your property management firm can better enhance your cash flow and extend your budget.

1. Access the best vendors—and negotiate for you

Evaluating vendors, sending requests for proposals, interviewing, and selecting the right partners takes significant time and effort. This is not to mention the stress that accompanies financial negotiations. Sometimes, vendors who seem affordable initially can end up overcharging as projects continue. Worse yet, some might adhere to their quoted price but fail to complete the job satisfactorily or on schedule, or provide poor customer service.

An effective property management firm will have established long-term relationships with top local vendors and excel in negotiating favorable rates, achieving added value savings. Through skillful renegotiation of existing contracts, communities can potentially save hundreds of thousands annually across various services without compromising on quality or service.

2. Be proactive about cost-benefit analyses

Determining whether it's more economical to keep services like janitorial work in-house or to hire third-party vendors can be challenging. For instance, conducting a thorough cost-benefit analysis may reveal that hiring in-house staff improves service hours and manpower while reducing expenses. Such an approach not only provides immediate savings but also lessens the likelihood of larger future repair costs due to enhanced routine maintenance.

3. Research and apply for grants for your community

If your association has postponed critical projects due to limited funding, consider exploring funding through grants. Federal, state, local, and private entities sometimes offer grants for community improvements. These can be challenging to locate and apply for, but a dedicated property management company can undertake this detailed research and complex application process. Successfully securing such grants can enable significant enhancements with minimal financial impact on residents.

These strategies demonstrate how associations can save substantial amounts each year by collaborating with an exceptional property management company. How might your association tap into potential savings?