Manage Your Home Like an HOA

When I bought my first home most of my thoughts revolved around making the mortgage payments, keeping the utilities on, and the daily expenses of living. I based my home purchase on what the bank told me I could afford. This was in 1985 and I had just turned 24 years old. What did I know?

In fact, to make the payments the first few years I rented out a couple rooms and worked a lot of overtime. Lenders were very liberal with what they said you could afford.

What many lenders and real estate agents fail to mention to first time buyers is the cost of upkeep on a home. This didn't mean just the occasional leaky faucet, although it seemed every faucet I had developed a leak in the first 6 months. This also meant some fairly expensive replacement or service items as well. My home was about 10 years old when I bought it. Since most items that make up a home last at least that long pretty much everything was original including the water heater, carpets, and paint.

So what was my budget strategy? Admittedly there was none. When something broke it got replaced with the help of a Visa or MasterCard. If something became worn, such as the carpet, it just got worse. I had no tool to help me figure out what I needed to try and set aside for these “unexpected” expenses.

I was lucky in some ways that my first home was a townhouse in a Home Owners Association (HOA) where major expenses like roofs and exterior painting were handled through the association and my monthly dues.

HOA's are required by law to develop comprehensive budgets and reserve studies to determine their budget for maintaining or replacing the items identified as their responsibility in their documents. This includes a formula for how much needs to be set aside (reserved) for meeting those future obligations.

Over the last few years I thought about how it would be great to find an easy tool for individual homeowners to use the same concept to assist them in planning their home care. I never found one that was especially useful. So about a year ago I started developing an application through my other venture SLV Technology called Epic Structures. It's in beta release now at www.epicstructures.com and free while more features are being added. Of course, always free for my clients. Check it out and let me know what you think.