Budgets

Started by JeffH1 • 3 replies • 1640 views

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JeffH1 (Georgia)
Posts: 12

Posted:

Any recommendations on doing budgets and how to go about taking the current years numbers and coming up what the increase will be for the following year? Is there a standard % that people us from one year to the next?

Thanks

GlenL (Ohio)
Posts: 5,491

Posted:

Jeff,
We start with the amount we are contracted for - trash, landscaping, cleaning, pool care, reserves, etc. We look at what we’ve paid for water & electric for the past year and factor in a % increase of at least the rate of inflation. Each Association is a little different, what works for one won’t necessarily work for another.

Studies show that 5 out of 4 people have problems with fractions

GeraldT1 (<Not Specified>)
Posts: 519

Posted:

JeffH1,

It can be argued that cost of living generally inreases 3.4% whereas construction costs have increaesed 18.5% over the last 3 years. If you are budgeting for reserves of common elements, consider the rise in construction rates to factor projected maintenance increases.

GeraldT1
NNJ

PatrickH (California)
Posts: 204

Posted:

Jeff,

All good replies about working on your budget.

One thing I wanted to point out was insurance costs. As one of the posters mentioned, construction costs have jumped in the past few years, so depending on whether or not you have a lot of structures and improvements to insure, the "replacement cost" for those items can skyrocket. If the replacement costs increase 9.5% in a year for example, expect your insurance costs to go up at least that much.

It can be one of those sneaky "budget busters" that you don't see coming until the new policy arrives. Stay in contact with your insurance broker throughout the year to get their idea of what might be coming.

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