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Financial Sustainability for HOAs in 2019 and Beyond: How CAP Can Help

One of the most important elements of an HOA is that it exists, hopefully, in perpetuity. This means having a long term, achievable plan for the present and the future. In a word, your HOA must have sustainability as one of its core values. This can take many different forms, from anticipating future projects, using green technologies, and having a strategic vision for the community’s growth. In this blog, we will be speaking to one of the most important elements of sustainability for an HOA: Financial Sustainability.

Financial Stability & CAP Management

CAP Management facilitates financial sustainability in several different ways. First, by providing complete, accurate financials by the 6th business day of every month, we are able to provide a snap shot of the financial situation to our clients on a consistent basis. This removes the guess work that may be involved in figuring out where the Association stands. By being consistent, we are able to show how funds move, and why they did, and when. We do a complete report of all the bank accounts and homeowner accounts in your community – again, allowing the Board to make sound decisions that work for their community as a whole. These reports are powerful tools that give our Boards a clear lens to see both the strengths of their HOA and where they need to improve.

We also use a 3 Page Strategic Plan with 1 month, 3 month, and 12 month goals. This allows the Property Manager to get a clear picture of what needs to get done, and gives the Board a realistic view of what is planned and when that plan will be put into place. By having an accurate and updated Strategic Plan, we are able to quickly summarize the HOA’s situation and, paired with our financial package, allow the board to evaluate our performance and the overall health of the HOA.

HOAs & Financial Stability

Financial Sustainability is also, pardon the cliché, a state of mind. The Board must be able to take a long-term view in terms of its actions. It should understand itself to be simply a point on a continuum – there will always be a Board President or Treasurer who will come after or who came before; the Board’s role is what is important and what decisions they make will affect the person who has that role down the line. By taking a long-term view and being willing to make hard decisions – in some cases sacrificing present day needs to fulfill long term goals. At CAP Management, we focus on balancing short term returns with long term needs.

For example, you may have a homeowner who really, really, wants to re-do the walkways – they are not as modern as they could be and have some small cracks from wear and tear, but they function and are not a hazard. This might be something that might please that person but is not being planned to be replaced until 2 years down the line. The Board needs to be able to weigh that one person’s displeasure against the fact that the funds for that project will not be available until the time comes in the plan. This does not mean the Board needs to be so rigid that it can’t adjust – change is, indeed, a constant – but that its stance needs to be about the long-term goals and not short-term people-pleasing. Just as the Board would not want to set a precedent about enforcement issues, the Board should be aware that their actions in terms of financial decisions will set an example for future members.

Sustainability is one of CAP Management’s key values

Many people, when they think of sustainability, think of the environment but that is just one piece of the puzzle. For an HOA to be financially sustainable, it must have an accurate reading of its financial situation and what kind of expenses it can expect down the road.

CAP Management is committed to helping your community to be sustainable and we have resources that can help you achieve that goal both now and in the future.