The Challenge: A Stagnant Reserve Fund
The Green Meadow Estates Homeowners Association (HOA) faced a common but frustrating financial challenge: their reserve funds were parked in a low-yield account that barely outpaced inflation. While the board was diligent in managing community expenses and maintaining common areas, they had not revisited their investment strategy for years. The result? Their reserve fund, meant to sustain future repairs, capital refurbishments, and unexpected expenses, was failing to keep up with rising costs.
Each year, the HOA struggled with difficult budget decisions—should they increase dues, impose special assessments, or defer maintenance? These choices left board members frustrated and homeowners uneasy about their long-term financial stability.
The Solution: Partnering with The March Group
Recognizing the need for a fresh approach, Green Meadow Estates partnered with The March Group, specialists in addressing HOA reserve fund investments. The process began with a comprehensive review of the HOA’s financial landscape, budget, reserve study, risk tolerance, and long-term objectives. The March Group’s team worked closely with the board to craft a customized investment policy statement and cohesive strategy aiming to:
- Appropriate returns without excessive risk – ensuring all funds were preserved yet remained accessible while working harder.
- Align with future Reserve repair, replacement, refurbishment needs – timing investments to match upcoming repair cycles.
- Improve financial planning – allowing the board to project costs with greater confidence and avoid reactionary fee increases or special assessments.
The Transformation: Smart Investing for a Sustainable Future
Within months of implementing the new investment strategy, the HOA experienced a dramatic shift in financial confidence and strategic planning:
- Increased Growth Without Increased Risk
By reallocating their reserve funds into a well-structured portfolio designed for stability and incremental growth, the HOA saw an improvement while maintaining necessary liquidity. - Confidence in Future Planning
The board no longer had to scramble when unexpected expenses arose. They could now anticipate capital expenditures—such as roof replacements and repaving projects—without burdening homeowners with last-minute assessments. - Stronger Financial Communication
With clearer projections and a structured investment approach, board meetings transitioned from “How do we cover costs?” to “How do we plan for long-term community success?” This transparency reassured homeowners that their money was being managed effectively. - A Competitive Edge in Property Values
A well-funded reserve signaled financial stability to potential homebuyers, making Green Meadows Estates a more attractive and well-managed community.
Conclusion: A Better Mousetrap for HOA Reserve Funds
Green Meadow Estates’ success demonstrates that HOAs do not have to settle for underperforming reserve funds. By leveraging experienced guidance from The March Group, the board gained confidence in its financial outlook, turning a passive account into a proactive investment strategy.
With their future now on solid ground, the HOA no longer views its reserve fund as an obligatory savings account but as a powerful tool for maintaining and enhancing the community for years to come.
Want to explore how The March Group can help your HOA build a better financial mousetrap? Contact us today.
Nico F. March is the Managing Director of The March Group, LLC. He has collaborated with Community Associations since 1974and has served on several Boards, including the Board of Directors for the Community Association Institute (CAI), San Diego Chapter.
His team has specialized in Corporate Cash and Association Financial Management since 1982 and has assisted over one thousand Associations, Nonprofits and Timeshares invest reserve, operating, tax impound, SIRS and reconstruction funds. Nico and his team work out of their San Diego, Florida and Wyoming offices and may be reached at 888.811.6501 or email: [email protected] for further information and consultations.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and there is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
This is a hypothetical situation based on real life examples. Names and circumstances have been changed. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or strategies may be appropriate for you, consult your advisor prior to investing.
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