Budget Season: Building a Better Budget for Your Community in 2027

As community associations begin preparing for 2027, budget season offers more than an opportunity to balance its income and expenses. It provides a chance to shape the future of the community. Whether your association oversees a condominium, homeowners association (HOA), townhome community, or mixed-use property, a well-planned budget serves as the foundation for financial stability, resident satisfaction, and long-term property value preservation.

Why Budget Planning Matters More Than Ever
Communities continue to face increasing expenses related to insurance, utilities, vendor services, maintenance, and capital improvement projects. At the same time, homeowners and residents expect well-maintained common areas, responsive services, and attractive amenities.

A well-thought out 2027 budget helps   board members anticipate these challenges rather than react to them. By proactively planning expenses and reserve contributions, associations can reduce financial surprises and avoid the need for special assessments whenever possible.

Budgeting is also an opportunity to align spending with the community’s goals. Whether the focus is improving amenities, enhancing security, increasing sustainability, or preserving aging infrastructure, the budget should support these priorities.

Reviewing the Past to Plan for the Future
The best budgets begin with a thorough review of current financial performance. Board members should compare actual revenues and expenses against the current year’s budget to identify trends and areas requiring adjustment.

For example, if landscaping costs increased significantly due to labor shortages or if utility expenses exceeded projections, those factors should be incorporated into the 2027 plan. Understanding historical spending patterns allows associations to create more accurate forecasts and make informed decisions.

Regular financial reviews also help identify opportunities for efficiencies, ensuring community funds are allocated wisely.

Don’t Overlook Reserve Funding
One of the most important components of community budgeting is reserve funding. Reserve accounts are intended for major repairs and replacements, such as roofing systems, pavement resurfacing, elevators, siding, and other common-area assets.

A current reserve study can provide valuable guidance when determining appropriate funding levels for 2027. Boards should use reserve recommendations as part of a long-term financial strategy rather than treating reserves as an afterthought.

In light of Fannie Mae’s updated lending standards, reserve planning has become even more critical. Beginning in 2027, condominium associations may be required to allocate at least 15% of annual assessment income to reserves. This is up from the previous 10% threshold or demonstrate compliance through a current reserve study and funding plan that supports the association’s long-term capital needs. Maintaining adequate reserves not only helps prevent special assessments and deferred maintenance but can also support mortgage eligibility and protect property values within the community.

Planning for Operational Cost Increases
Property management professionals across the industry continue to see rising operational expenses. Vendor contracts, insurance premiums, maintenance services, and utility costs are expected to remain important budget considerations.

Building realistic increases into the annual budget can help prevent sudden financial pressures throughout the year. While controlling spending remains important, communities should focus on overall value rather than simply selecting the lowest-cost options.

Reliable contractors, quality maintenance services, and proactive management often save community associations money over time by reducing costly emergencies and preserving community assets.

Supporting Property Values Through Strategic Investments
Budget season is also the ideal time to consider investments that improve the community’s appearance, functionality, and resident experience.

Projects such as upgraded landscaping, improved lighting, energy-efficient solutions, enhanced communication tools, and security improvements can positively impact homeowner satisfaction and property values. While not every initiative needs to be completed immediately, budgeting for future improvements helps communities make progress toward long-term goals.

The most successful community associations strike a balance between maintaining current operations and investing in future enhancements.

Preparing for a Stronger 2027
Creating a community budget isn’t simply about numbers on a spreadsheet. It’s about ensuring the community association has the necessary resources to maintain assets, meet homeowner and resident expectations, and preserve property values for years to come.

At Corner Property Management AAMC, we partner with community associations and boards to develop strategic, transparent, and sustainable budgets that support the unique needs of each community. As budget season approaches, now is the time to review financial performance, evaluate future needs, and build a plan that positions your community for success in 2027.

New Jersey:
Lawrence N. Sauer, CMCA PCAM CPM at 973-376-3925, ext.129 or email larry.sauer@cp-management.com
Pennsylvania:
Andrew Batshaw at 973-376-3925, ext.191 or email andrew.batshaw@cp-management.com