At this point in time, so many people are taking advantage of sublets on Airbnb to make additional money. One of the companies that take care of connecting the right person to the right homeowner is definitely The Urban Avenue, which helps you prevent spending a lot of money on multiple agencies and waiting for the perfect match. But this revenue generating method isn’t possible for HOAs. On the contrary, most homeowners associations frown upon tenants subletting their apartments on hospitality websites.
As far as homeowners associations are concerned, there are definitely a few ways to earn more money for your community. In fact, not only is it possible to earn additional revenue, it’s also possible to cut down on your expenses, which is ultimately the same thing and often easier to accomplish.
Take caution though when first starting out. Think about the time, money, and effort involved needed to be successful in potential revenue generation activities. Make sure the revenue will outweigh the costs – both personally and monetarily – because you could otherwise end up wasting time and money that you’ll never recoup again.
With that said, we’ll take a look at some ways you can earn more money for your homeowners’ association as well as ways that you can attempt to save money. By implementing this dual strategy, your HOA will be able to create programs that will help monetize assets and have more cash on hand.
Is Your Clubhouse Sitting There Doing Nothing?
Many communities have a large, gorgeous clubhouse sitting there in the center of everything. For any community, this is certainly a great place to have available for residents to throw parties and whatnot. Unfortunately, many communities are missing an opportunity to recoup some of the clubhouse expenses by charging residents who want to use the clubhouse for private events. This poolside facility is the perfect place to rent out to residents who want to host a private party at the clubhouse.
I realize that the governing documents for some communities may not allow this practice. And even if it is permitted you will want to listen to the questions and concerns of the members before you take a step like this. You may find that you By involving the stakeholders and discussing it openly you will be able to determine if and how you can use your clubhouse to generate additional income.
Have You Considered Selling Advertising Space?
We seem to be getting bombarded with advertisements everywhere we go. Some may look at this positively while others look at it negatively. Regardless of your feelings, just realize that the community you live in is definitely a desirable target for those running local businesses. So, if you have a community newsletter, you should definitely consider contacting local businesses to give them an opportunity to advertise their products and services in your paper.
At the end of the day, offering ad space in a weekly, biweekly, or even monthly newsletter isn’t going to generate a great deal of revenue. But it’s definitely a fine way to earn additional income, and it could be one piece of your overall profit generation puzzle that ultimately ends up bringing in a decent amount of money over the long term.
Do You Have Unused Space in Your Community Doing Absolutely Nothing?
Is there any unused space in your community being wasted? Instead of leaving it sitting there doing absolutely nothing think of creative ways the area could be used to benefit the residents. Perhaps the area could be used for storage, parking, or even garden plots. By allowing residents to rent these areas, the association can help provide for the needs of homeowners while generating a little extra income.
Before diving into this project headfirst be sure to consult your governing documents and your attorney to be sure you are complying with the law and your governing documents. It’s also important to consider conversion expenses ahead of time. Will the cost make it worth the potential revenue? By thinking about the investment ahead of time, you’ll determine if this is a good revenue generating strategy or not.
Offer Multiple Payment Options to Homeowners
If your homeowners’ association is suffering from cash flow problems because you’re having a difficult time collecting homeowners association fees, you should seriously consider expanding your payment options. As an example, let’s say at the moment you’re only accepting cash and checks. This may have been the best way to collect HOA payments in the past, but the advances in technology mean better options for you and the homeowners in your community.
Think about adding different payment options for your customers. Start accepting credit cards, PayPal payments, E-checks, monthly recurring debits, or anything else you can think of. By expanding your options, you’ll have an easier time collecting payments from homeowners and your cash flow will improve because of it.
Become a Paperless Community
Many homeowners associations spend a great deal of money on printing, paper, handling fees and distribution costs to the management companies they deal with. At this point in time, simply using email and a website will eliminate hundreds of dollars in paper expenses every year, which will ultimately put more money in your pocket. So consider taking your community paperless as soon as possible.
Conclusion
As you can see, the HOA side hustle possibilities are endless. Proceed with caution to make sure you’re complying with the law and your documents, but thinking outside the box could prove to be the proverbial money tree.
- 5 Ideas For an HOA Side Hustle - February 21, 2018
Help
This is a great article, but associations have to be very careful about allowing AirBNB type uses within their community. I have been in insurance for 12+ years specializing in HOAs and Condos and I can tell you that no admitted carrier I’ve ever worked with has been willing to insure an association allowing AirBnB.
You may find some excess and surplus lines carriers that are willing to insure, but they will be much more expensive. (In my area our best admitted carriers can rate between $10 and $15 dollars for each unit – if you have to go out to a surplus lines market for liability insurance the same coverage could be $50 – $60 for each unit and possibly more depending on the presence of other exposures like pools, playgrounds, etc. and policy fees/state taxes tacked on.)
It comes down to the number of people using the facilities. The number of people making use of common elements (even if its just sidewalks or hallways) if AirBNB is allowed drastically increases foot traffic.
For example, lets say you have a 10 unit association, no short term rentals allowed, and 4 member families in each unit. Foot traffic is going to be 40 people (same people every day over the course of the year). Now, for simplicity, lets say just 1 of those units is posting on AirBNB and rents the unit every day for a year to a different 4 member family. Your foot traffic jumps to 1460 annually just for that 1 unit. And that doesn’t even include guests/visitors.
Now imagine what the difference could be in a 500 unit condo association with just 5% of units being rented via AirBnB. Can you see how it makes it harder for an insurance carrier to get a handle on their actual exposure? This is why carriers would see this as something akin to a hotel/motel exposure and steer clear.
If the association is going to try to make use of AirBnB to supplement their income somehow they should definitely run it by their insurance agent before implementing.
Thanks for taking the time to write this it is interesting to see a different option for how associations can pay their operating expenses.
Install solar panels to generate 100% clean and reliable power to the common areas. The money you save is tax free, and the technology is getting less and less expensive every year even with the recently imposed tariffs.
Thank you for the thoughtful and informative article. One big way to raise a chunk of funds is by doing an easement agreement with companies such as Comcast. They pay a good amount to have access within an Association. We help our clients with this process on a regular basis.
I’d like to hear more about this and how it would work. Does this mean signs and advertisement everywhere?. We are a small HOA in the state of Georgia.
Doing that deal may generate a load of cash but at the cost to the members of a much bigger load of cash. Been there watched it happen
Stimulating article Ashley! Some of my thoughts on the matter…
Idea #1: Improve the association’s financial situation by saving money. Performing major (Reserve) projects on schedule, avoiding expensive deferred maintenance, is a great way to save money… but it goes against the nature of many boards who think they are saving money by not spending it.
Idea #2: We found that boards that create a strong Reserve Fund at their condo association create higher home values for all owners – which is tremendous leverage for the benefit the homeowners. https://gogladly.com/blog/hoa-reserve-fund/