Homeowners assocation: percent of revenues to overhead?

[soupcxan]

We just got our 2010 HOA budget estimate. I've never looked at it that closely before. Total revenues (assessments to homeowners) is about $3M. Of that, 35% is for general & administrative costs. That seems high, but I couldn't find any benchmarks online. Does anyone know how to find out if that's in line with the average HOA?

 

[GoodSense]

I think ours is a lot lower, but I don't know the number off the top of my head. I think it largely depends on what your association does. For example, if we need a new fence, we (residents & board) need to contact fence companies, get our own bids and select a vendor. All our management company does is cutting the check. We have to read our own water meter. We also don't have a security guard.

Could you tell us what your association does?

 

[Meadbh]

Just happened to have the budget for one of my rental properties handy. General administration is 28% of total expenses. This category includes the caretaker and security. YMMV.

 

[grumpy]

soupcxan,

I have our HOA's 2010 budget available. Can you be more specific about what you consider general and administrative costs so I can give you a comparison? For example, we have a contract with a management company for most administrative functions and a contract with another company that provides a manager for our clubhouse. What other functions are included in your total for general & admin?

Our total budget is approx. $2M. We have 800 homes in our gated community with extensive recreation facilities (indoor and outdoor pools, fitness center, tennis courts, etc.).

 

[Leonidas]

Seems like most of our HOA budget comes under the category of "General":

Assessments: $9.3 Million

General Expenses: $6.35 Million.

The General Expenses category includes about $3.9 Million for maintenance of landscaping, parks, lakes, common areas, and common area utilities. The rest goes to administration, professional services, deed restriction compliance, insurance and taxes.

 

[Meadbh]

The 28% I quoted does not include insurance, which is substantial and essential. I guess we really need to be clear about the definitions. Perhaps we should focus on office and professional expenses and compare those?

 

[Texas Proud]

One of the costs that surprised me on my old house was the cost of the POOL... it was $50K per year.. and only opened during the summer months 'full time'.... (and not that full time IMO)...

So by my accounting, the costs were between $10K and $15K per month to have a pool.... kind of expensive IMO...

Don't have anything for the OP... but I do remember that the admin was high, but that was due to someone getting on the board and hiring his own firm at a high rate... I think they got him off last year, but not sure...

 

[Meadbh]

One of the costs that surprised me on my old house was the cost of the POOL... it was $50K per year.. and only opened during the summer months 'full time'.... (and not that full time IMO)...

So by my accounting, the costs were between $10K and $15K per month to have a pool.... kind of expensive IMO...

Don't have anything for the OP... but I do remember that the admin was high, but that was due to someone getting on the board and hiring his own firm at a high rate... I think they got him off last year, but not sure...

I have another property in a building that had a pool. When we surveyed the residents and collected data, very few people were using the pool. We filled it in and built a community garden instead. It's much more popular.

 

[soupcxan]

Of the 35% for G&A, the biggest components are (percentages are out of the $3M total):

Administrative staff 11%
Enforcement staff 7%
Rental expense 4%
Legal expense 3%
Management fee 3%

The rest is smaller stuff like telecom, postage, etc.

 

[BUM]

From the other side of the telescope... our HOA G&A is zero. We live in a 4 family building with a budget of $12,000 annually. Almost all of the money pays insurance premiums. Being a DIY nut, I perform most of the repairs for material cost only. Big jobs (like painting) require special assessments. Sometimes I wish I was part of a larger enterprise that "took care of everything".

 

[mews]

my buidling is bigger than bum's, but smaller than the complexes y'all are describing.

we have a managing agent and company that does the check-cutting, tax forms, compliance with this-n-that rule, as well as a very active treasurer on our board. She did a lot of rearranging of how various bills and expenses were posted. G & A can become a 'garbage' category. Can you get a break-out?

 

[BUM]

G & A can become a 'garbage' category. Can you get a break-out?

You can ASK for anything, a copy or just a look at the bookkeeping reports, bank statements, HOA tax return, etc. If this info is not available, ask why.

 

[jimnjana]

Our HOA has spent over 90K just on legal fees this year. A bit over budget, but they are in the process of placing liens on over 50 lots owned by the developer as well as several other home owners who for various reasons are having liens placed on them or have already been taken to court. Overall Admin costs are about 30% of the annual budget, we do have a pretty healthy HOA, no thanks to the developer who owes in excess of 400K to it. Both the builder and developer are in financial trouble.

 

[Rustic23]

Our HOA is in good shape financially. We charge $300 per year per lot. We provide 24 hour security, and Ambulance for 12 hr. a day, two fire trucks and station for volunteer fire department, a manager, an assistant, and year round maintenance. We also have a health reserve fund. We don't, however, supply a pool. Admin. cost are about a third of our total budget.