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Creative Options for Generating Reserve Funds

Reserve funds are important for keeping your community running smoothly. Read here to learn about your HOA board's options for generating reserve funds.
Camille Moore | Mar 28, 2024 | 3 min read
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Maintaining a reserve fund is a part of sound community association management. Without the fund, a community has one option for paying for unexpected expenses—asking residents to pay additional fees, often on short notice.

In some cases, charging additional fees is an acceptable way of affording new expenses, but charging high fees on short notice rarely sits well with residents.

Fortunately, additional fees can sometimes be avoided or mitigated by taking creative steps to generate additional reserve funds.

Below are some examples of how providers of community management services help HOA communities generate reserve funds without charging extra fees.

Renting Common Ground

Common ground such as parks, gardens, and lakes are ideal locations for various forms of recreation, such as concerts, cookouts, and fishing.

They are also desirable locations for weddings. If a neighborhood has attractive common ground, renting it to the public during favorable seasons could generate thousands of dollars for the reserve fund each year.

Renting Unused Parking Spaces

If the community is located in an area where parking space is limited, it may have the option of renting unused parking space to the public.

In urban areas that have a high standard of living, unused parking space can be rented out for lucrative sums. If the community needs to reclaim the space, its community association management company can take it off the market.

Renting Roof Space

If a neighborhood has tall buildings with flat roofs, it may have the option of renting roof space to a wireless service provider.

Having a cell phone tower stationed on the ground could alter the appearance of a community, but stationing it high on a roof avoids unsightliness.

If a community has tall, flat roofed buildings, its provider of community management services should explore renting roof space to a wireless service provider.

Allowing Non-residents to Use the Golf Course

More people are taking up golf as a hobby, and private golf communities are known for having excellent golf courses.

If a community features a golf course, it could open the course to the public on certain days of the week to earn additional income. Depending on the quality of the course, the fees for using it could generate significant income.

Generating Revenue Through Community Publications

Many HOA communities have a website and a print publication that announce events in and around the neighborhood.

If the community needs additional funding, selling advertising space on the website or in the publication is one way to generate revenue.

If the website has a blog that is followed by numerous residents, it may generate interest from advertisers who sell goods and services that appeal to the community’s demographic.

Final Thoughts: Do Not Wait to Increase the Reserve Fund

HOA communities use reserve funds to pay for unexpected expenses, such as storm damage and equipment failure. When the fund is inadequate, residents are often called on to make up the difference by paying additional fees.

Although charging an additional fee is a normal way of paying for neighborhood expenses, the fee should not be unusually high, or levied on short notice, as it often is when the reserve fund is depleted.

If a community needs more capital in its reserve fund, the strategies above are some options the community association management provider should explore.

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