Home Owner Associations and the Benefits of Co-ops
Many communities and neighborhoods across the country are managed by home owners associations, or a HOA. A HOA is a community within a municipality that controls property that is bought or rented by consumers. The homeowners or renters within those HOA communities will pay extra fees per month to the HOA. Those fees help the HOA with their administrative costs, the maintenance of all of the properties and the grounds, and several amenities, like gyms, parks, snow removal, garbage service, and on-call maintenance.
One of the best examples of this is a condominium complex. In such a complex, every person owns the condo unit they live in and pays for its financing through a typical mortgage. However, the condo owner must pay monthly fees to the condo HOA and follow the property rules the HOA enforces for all condo owners. Violation of these rules could vary in terms of disciplinary actions, such as fees or being asked to sell the condo and leave.
A HOA is an excellent business venture since it allows a management group to help maintain a local community within a city or town. By promoting the community, the HOA can earn solid profits while providing residents of a city quality homes or apartments. However, like any business, a HOA seeks to cut costs and increase profits. One such way is to join a co-op.
A co-op, or a cooperative, is a business structure where individual people share managing responsibilities. Co-ops cut administrative costs while increasing managerial control over the business by designated members. Membership into a co-op can increase over time. This helps to increase capital of the co-op since a new member would merge their capital and assets into the co-op.
In terms of a HOA, a co-op structure helps the HOA participate in a larger business, like Innovia CMC, that has more resources to disseminate across co-op members. Say a local HOA joins a national co-op; the HOA will now be able to access resources, technology, marketing strategies, and other investments that all national co-op members can utilize. In addition, administrative costs can be reduced, such as human resources management or accounting services.
A HOA may provide great homes for people to live in, but it can only do that if it can remain competitive. By joining a co-op business with other HOAs, any local HOA can reduce their business expenses and maintain quality service to all their homeowners or renters.