Maintenance is important when managing a homeowners’ association but additional improvements are what make the community truly stand out. Instead of fixing problems as they arise, successful HOAs make a point to budget and truly invest in their community. It’s not only beneficial for the neighborhood, but it’s also necessary if you want to increase the value of your property. One of the best ways to improve your community is to embark on capital improvement projects. Don’t know where to start or what these projects even are? We break down the basics below.
What are capital improvement projects?
The goal of capital improvements is to increase the property value of your community. These upgrades differ from regular maintenance and repairs. Improvement projects are in place to improve the quality of the community, whereas maintenance is in place to fix things when they break. Some examples of capital improvements include roof replacement, new construction of amenities (pools, parks, gyms, etc.), repaved roads, and installing new sprinkler systems in the community. All of these projects are for the enhancement of the entire neighborhood or condominium community.
Why are capital improvements necessary?
The upkeep of your community with capital improvements is necessary for aesthetic purposes – but also for legal purposes. In Tennessee, it is now law to have reserve studies completed every five years. Reserve studies are assessments designed to lay out the future needs of the community to prevent safety hazards. At EZR, we have special software that easily tracks dates of project completion and preparation for future tasks.
How can my HOA best finance capital improvements?
The best way to financially plan for capital improvements is with a reserve fund. A reserve fund acts as an HOA’s savings account. Part of your HOA dues enters this account to allocate for future needs, like capital improvements. These reserve studies, which are required by law, will help your association plan a budget for future projects. Our software easily tracks costs and estimates for future projects, so the chance of surprise charges is minimal. Our recommendation is to plan ahead for these projects by gradually increasing dues, rather than a large, unexpected charge down the line.
Here at EZR, we excel in HOA management, and capital improvements are one of the many topics our experts can advise you on. For almost two decades, we have helped properties around Memphis develop valuable capital improvements. Reach out today to get started!