HOA living has many benefits, from preserving property value to amenities. Still, the first thing you hear about most HOA communities is about fees.
At first glance, sure, HOA fees in Delaware can seem high. The real question, however, is: are they worth it? If your members feel they're getting important benefits for their money, they won't mind paying their dues (as much).
As an HOA board member, it falls upon you to provide those benefits. Read on to learn what HOA fees should cover and how much to charge for them!
What HOA Fees Must Cover
The things HOA fees pay for can vary wildly. This depends on factors such as your community's size, available amenities, and more.
In general, though, you'll use your budget to fund annual maintenance tasks. These tasks play a key role in preserving property value and aesthetics. This will help keep current residents happy while attracting new ones.
Of course, every HOA budget should also have a rainy day fund. This is something you can tap for unexpected expenses. If your fees are too low, you may have to charge special HOA assessments to cover certain costs.
How Much to Charge for HOA Fees
When setting HOA fees, consider your operating expenses. The more your HOA offers, the more you'll be able to charge.
Start by looking at your projected expenses over the coming year. Will you have enough left over to contribute to the emergency fund? If not, consider increasing your fees until the supply matches the demand.
Next, you'll need to look ahead to future projects. When will you need to replace the pool equipment or resurface tennis courts? Use your HOA meetings to find out what projects your members want to prioritize.
The economy is another big piece of the fee puzzle. HOA fees cover the costs of goods and services, which are both impacted by inflation. If the inflation rate is high enough, you'll need to raise HOA dues as well.
Finally, look at your local competition. Do some research to find out what similar HOA communities in your area are charging. Marketplaces like Zillow and Redfin include HOA fees in their listings.
The Importance of Transparency
Remember how we talked about making your HOA fees worth it? To do that, you'll need to be transparent with your HOA community.
For starters, your members should always be up to date on your finances. They need to know where their money is going. If there are any budgeting changes or new fees to pay, let them know about it in advance.
Don't forget to use different communication channels! Busy parents may be fine with email updates, but older residents may prefer in-person contact. If needed, hire a property management firm to improve tenant relations.
Now You Know How to Set HOA Fees
The bottom line: setting HOA fees can depend on many factors. From your location to the economy, you'll need to do a lot of research before reaching the right number. The above guide is a great place to start!
Need some help with establishing HOA fees in your Delaware community? At PMI First State, we have over ten years of experience in these matters! Fill out this form to get in touch with our property management experts!
