The mortgage crisis and recession hit homeowners hard, and many people are still struggling to recover. This crisis was traumatic for how it hit people in many ways. Beyond losing a home, many lost a sense of security and a long-term dream. It also made very clear for many our homes are our largest, perhaps only financial asset.
Can you afford financial surprises to your home
Special assessments are often not planned, large payment obligations. All homes within associations are subject to special assessments. These are extra expenses outside of regular dues to tackle important situations. They can be a surprise, creating challenging situations including financial distress.
Financial Shocks = Special Assessments = Hidden Debt
Unfortunately, this was the reality for home owners in a North Bay community. Each individual owner faced a $145,000 special assessment. These stories are more common as properties age and costs continue to escalate.
You need to know your true hidden debt
The challenge is that many associations view long-term obligations as optional expenses. Boards often avoid increasing dues without realizing that they are creating debt. When these obligations come due there’s little ability to postpone the expense. Also, the set aside reserves funds are inadequate. Putting off these expenses adds cost and risk. This puts the owners, boards and managers in difficult situations.
Debt creates the special assessment
There are 4 important factors that lead to hidden debt:
- ‘Low’ dues: Monthly payments aren’t enough to cover costs
- Missing things: Large expenses aren’t being well-tracked
- Funds falling behind: Long-term money is losing value
- Cost growth: Total expenses are growing faster than anticipated
Do you have the expertise and oversight to help?
The key challenge facing owners is that the value and quality of their homes are in the hands of volunteers. Often without the tools necessary for long-term financial and fiduciary management. It isn’t easy serving on a board. There is no manual, and there are untold legal and financial risks. Managers have the same challenges needing access to the information and tools.These are some common challenges:
- Near-term thinking: Trade-offs down the road aren’t understood and corners get cut
- Lack of time: People are reactionary, not proactive, putting off important issues
- Missing information: What you need to know is masked and difficult to get
HomeRun IQ has created the solution for owners, boards and managers. Our homes are important personal and financial assets. Don’t leave them to chance.We offer a simple to use, powerful technology that provides long-term financial management. You get control of your long-term financial situation. You determine the best plan to meet your needs and have it put to work for you, easily. All while meeting fiduciary and legal obligations.
