Were you aware that close to 30% of homes in Chicago belong to an HOA community, according to Chicago Agent Magazine?
Being part of an HOA board means that managing fees is a huge task. These fees can't keep the community healthy if they're spent unwisely.
How can your board handle HOA fees the right way? Read on for our HOA fee guide.
Understanding HOA Fees Breakdown
The first step in managing HOA fees is knowing where the money goes. An HOA fees breakdown shows how the fees are distributed. Common areas where fees are spent include:
- Maintenance
- Utilities
- Insurance
- Reserves
- Management costs
By understanding the HOA fees breakdown, the board can ensure the money is spent wisely.
The HOA Fee Structure
The HOA fee structure refers to how fees are determined for homeowners. The structure often depends on factors like property size, location, or the number of amenities. Some associations charge the same fees for all units, while others charge different amounts based on these factors.
For example, a homeowner with a larger unit or one with more amenities may pay higher fees. The HOA board must decide on a fair structure that reflects the services and benefits each homeowner receives.
Average HOA Fees in Chicago
In Chicago, the average fees vary depending on the type of property and location. Condominiums, for instance, might have higher fees because they often offer more amenities, like pools or fitness centers.
On average, Chicago HOA fees range from $200 to $700 per month, with $312 being the average, according to Ruby Home. Some luxury properties can charge over $1,000 a month.
HOA Budget Planning
Good budget planning is the key to managing HOA fees effectively. The HOA budget should include all expected expenses for the year, from maintenance to utilities. To plan your budget, follow these steps:
- Review past budgets
- Estimate costs
- Set realistic goals
- Communicate with homeowners
A thoughtful budget prevents surprises and keeps the community running smoothly.
Reducing HOA Fees
Every board wants to keep HOA fees as low as possible while still maintaining quality services. Here are a few ways to reduce HOA fees:
Talk with Vendors
Look around for the greatest deals on services like landscaping, cleaning, and maintenance. Consider switching vendors if you can get a nicer price for the same quality.
Use Energy-Efficient Solutions
Installing energy-efficient lighting and equipment can reduce utility costs over time. Solar panels or energy-efficient appliances might need an upfront cost but can save money in the long run.
Regular Maintenance
Preventative maintenance is cheaper than waiting for things to break. Regularly inspecting roofs, plumbing, and other systems can keep fixes small and affordable.
Volunteer Work
In some cases, homeowners may be willing to volunteer for small tasks, like landscaping or organizing community events. This reduces the need to hire outside help.
Managing HOA Fees Well Is Crucial for Your Community
Managing HOA fees is one of the most important responsibilities of an HOA board in Chicago. By understanding the HOA fees breakdown, setting a fair fee structure, and planning the budget carefully, you can keep the community financially healthy.
Does your Chicago community need help? Contact PMI Windy City to learn about our incredible association management services. Our team has over 50 years of combined experience, so you can rest assured your assets are in great hands.
