Large capital improvement projects can add significant value to your community association. From replacing roofs to resurfacing roads and upgrading amenities, these projects are expensive and time-consuming, but when done right, are very worth the effort.
The most important thing about large capital improvement projects is preparing correctly for them. Doing so can reduce unexpected costs, project delays, and homeowner frustration.
If your Board is new to taking a proactive approach to capital improvement project planning, this is the post for you. In it, we tell you everything you need to know about large capital improvement projects and how to prepare correctly for them.
What are Capital Improvement Projects?
Let’s begin by discussing capital improvement projects. These are major repairs, replacements, or upgrades that extend the life, value, or functionality of your community’s assets. Common large capital improvement projects include:
- Roof replacement
- Road and parking lot resurfacing
- Sidewalk and curb repairs
- Pool renovations
- Clubhouse upgrades
- Playground replacements
- Exterior building improvements
- Stormwater drainage improvements
Often these projects are funded using the community’s reserve funds. However, the planning phase should go well beyond just finding the funds to complete them.
How to Prepare for Large Capital Improvement Projects
All community associations need large capital improvement projects to stay financially stable and ensure resident satisfaction. The following steps can help your Board prepare correctly and minimize disruptions to residents.
1.) Start planning early.
The earlier you plan a large capital improvement project, the better. Your Board should keep a list of upcoming repair or replacement needs, including projects not needed for at least several years. Doing so will give you plenty of time to prepare adequately for the project.
Reserve studies, property inspections, and maintenance reports can all help your Board determine the major community assets most likely to need repair or replacement. Starting the planning process early can give your Board more time to develop the budget and find the right vendor for the project.
2.) Review your reserve fund.
Because large capital improvement projects are often funded using reserve funds, your Board will need to review your existing reserve fund before approving the project. Make sure there are sufficient funds to complete the work on time.
If you find that your reserve balance is lower than anticipated, you may need to adjust the project’s budget or increase reserve contributions. Scheduling regular reserve studies can also ensure your association remains financially prepared for large-scale projects.
3.) Create a realistic budget.
Having enough money in your reserve fund is not enough. You also need to plan your budget carefully. Consider the following in addition to construction costs.
- Engineering or architectural services
- Permit fees
- Project management costs
- Material price fluctuations
- Contingency funds for unexpected expenses
4.) Obtain multiple bids.
The contractor you choose will have a crucial effect on the success of the capital improvement project. Your Board will need to choose wisely. Soliciting multiple proposals and bids can help you compare pricing, timelines, experience, and references. Use this information to pick the company that aligns with your community’s needs and budget.
5.) Partner with a professional community association management company.
A professional community association management company, such as ACRI Community Realty, can help your Board prepare for any capital improvement project. From contract administration to budgeting and ongoing oversight, our team has the skills and experience needed to ensure your project is completed successfully every time.
Contact ACRI Community Realty today to learn more.
