By Deena Kanoff, Director of Business Development
Jon Wayne Construction and Consulting
In these economically challenged times, how does a Board of Directors maximize their hard-earned reserve dollar?
They target obvious problems relating to maintenance issues, and fix them. When it comes to increasing and maximizing property values, that’s a lesson any Community can apply.
Here are a few places to start:
A question to ask yourself – How desirable is your Community to live in?
When it comes to new or potential owners, often they’re influenced by something as tangible as good old fashioned curb appeal, or what they see when they first look around.
So, the first key to strong property values is also the most obvious: Keep your focal points well maintained!
“You get what you pay for”
The most direct correlation for a Community may be between its property values and its assessment level. It’s not that people have to be convinced that a higher assessment rate always equals higher values. But rather, they usually have to be convinced that a lesser rate doesn’t equal higher values.
There’s a mindset among owners that if an assessment fee is too high, it’s going to (adversely) affect the value of the units, and turn away potential buyers.
In fact, whatever superficial appeal your Community tries to gain from keeping its assessments too low is, quickly squandered away by the damage of an underfunded budget and a reactive maintenance program that simply cannot address the repair maintenance needs throughout the Community.
Simply stated: If you do not have enough money in your reserves to take care of maintenance issues within the Community, all you do is begin to attract similar buyers in the marketplace that are interested in perpetuating the same low, depleted reserve budget. Maintenance issues become worse, and available funding becomes non-existent which equals a very bad combination in maintaining the property value.
The Association needs an annual “cost of living raise”, in order to maintain the integrity of the components within the Community. When you have an assessment rate that ‘s realistic, the other financial objectives will fall into place; a full operating budget, necessary to maintain the building structures and repair issues within the Community and common areas. It is easier to move forward with repairs when you have readily available funding.
Tomorrow is a new day, but so is the “day after”
In today’s economy, can you plan for property values to go up…or down?
Even with a crystal ball, you cannot determine what will be. But what you can do is implement all common area repairs that enhance property values. At the same time, work should be prioritized to insure the most important issues are addressed starting with Life/Safety and Health.
A well maintained property is key!
There should be short-term and long-term goals set up during the planning phase of the project that identifies the remaining useful life of common area components and components that are beyond repair and should be replaced. This is the most cost effective way to maintain the Community, reduce resident complaints, and maintain property values. Your property is the most valuable investment.
This well forecasted disciplined planning program, offers greater economic return, and in turn, money in the bank.
Global planning can provide a framework of strategies and endpoints joining one Board to the next, even when Board members leave, and new ones come on board.
It provides the stability that helps a Community thrive.
Board members need to see the big picture and how properly maintained properties is clearly the most economical choice in preserving their maintenance dollar!
“Hear Ye – Hear Ye”
Assuming your Board sees the big picture and your Association is doing well, the important question is: “Do your residents all know what is going on in the Association”? Do they know the improvements, and maintenance dollars are being spent wisely now in order to secure the future maintenance integrity of the property?
How about prospective buyers? By nature, people don’t usually seek out good news; you have to deliver it to them!
A newsletter that features the maintenance planning and upcoming projects helps in sending a positive message.
A friendly and inviting newsletter would increase the chances of a potential new buyer wanting to purchase into that particular Community.
A newsletter is a great tool to review the accomplishments of the previous year, and it also helps to forecast what’s to come. This type of “Community Tracking” aids the HOA in keeping the maintenance schedules up to date, and is a way to address future needs within the Community.
This is very important in today’s marketplace. With so many properties on the market, you have to create a way to stand out from the rest and provide information of what’s going on in your Community. Whether it’s capital improvement programs or full maintenance renovations that are taking place, “keeping the Community involved”, adds to the “emotional value” of the Community and promotes a positive Community experience.
About the Author: Upon graduating from University of Southern California Deena Kanoff was affiliated with an architectural firm prior to joining JWC in 1995. Deena is also a member of the following associations: AACM, CAI, and CACM.