Preparing-Your-Dallas-HOA-For-Inflation

Preparing Your Dallas HOA For Inflation

HOA Inflation Is Here

Preparing-Your-Dallas-HOA-For-InflationThere’s no denying it, inflation is here. Economists have been talking about it for a while now and the fact is it’s something we’re all going to have to learn how to work with. So what does that mean for your HOA? Well, it can mean a number of things from how it impacts your HOA, figuring out what your HOA can do, to compound benefits of inflation. Additionally, it can affect your budgeting as the cost of products and services are at an all-time high. To put that into perspective, they are the highest they have been in 40 years and show no signs of slowing down either. Read on to learn more about your HOA and inflation.

How Inflation Impacts Your HOA

Typically, unit owners within an HOA are likely pleased with the increase in the value of their homes. However, a high level of inflation is likely to have a potentially negative effect on the long-term financial health of the HOA.

At a professional level, expenses are going up for most HOAs. Landscaping costs are increasing as fuel prices rise and labor markets tighten. Property management, maintenance, and repair costs are also adjusting to reflect rising material prices and labor shortages. Along with utility bills getting more expensive due to the tracking of higher energy prices.

The board may find that their HOA is under-funded for a project budgeted many years ago. They only had around $1.2 million in reserves for the project and now face a $4 million shortage. This means current unit owners are taking the brunt of poor planning and higher costs.

What Can Your HOA Do?

Your HOA board should be planning ahead for large capital projects as costs begin to increase. With the addition of labor and energy cost increases, the issues with the supply chain continue to impact raw materials.

If your HOA board does not revisit outdated reserve studies, it is crucial to do so in light of current inflation rates. HOA Loans could be a very strategic approach for other tools to consider.

In light of the current inflation rates, HOA boards would be wise to revisit outdated reserve studies (if they don’t already do so periodically). A more strategic approach is for the board to consider other tools such as HOA loans.

For example, assume that an association anticipates a large capital project that will begin in a few years. Let’s say the cost of the project in today’s dollars is $10 million. If construction-related expenses increase annually by 10%, the same project will cost over $16 million in five years.

In this instance, an HOA loan makes perfect sense. Assuming that the HOA finances are healthy, the board can enter into a loan with a relatively low-interest rate. They can use the proceeds to complete the project today rather than wait five years.

Compound Benefits

If this project is completed promptly, the board can avoid future cost uncertainty. Loan-related interest payments for this project will then be considerably less than $6 million. The association would also eliminate the risks associated with future funding. If this HOA were to need a loan in five years, the interest rate environment would also be considerably less attractive.

Potential buyers would also be likely to discount the pricing uncertainty when a future project is necessary but left undone. Potential buyers are fearful of cost and financing uncertainty, not to mention general disrepair. Typically, home values are more likely to increase after a project has ended and when buyers can see community improvements.

Although inflation is rampant and prices are rising, the cost of debt has remained very low. Today’s Goldilocks scenario has created the perfect opportunity for HOA boards to think strategically about using debt to tackle large impeding capital projects. Perfect opportunities like this are not likely to remain available for too long. If your community is facing an imminent large capital project, let us help you strategize and model your loan options.

With inflation, HOA costs are rising as well, as we’ve discussed, due to labor and supply costs rising. But not all is bad news as financing is becoming cheaper! In many cases, the costs end up being a wash as we have a “Goldilocks” scenario. Classic Construction has a fantastic finance partner and we also have the ability to work on different maintenance plans for your HOA. Call us to schedule a meeting to talk about your HOA maintenance plan today!

Make-Energy-Efficient-Improvements-to-a-Property-by-Hiring-the-Right-Contractors

Make Energy-Efficient Improvements to a Property by Hiring the Right Contractors

Make-Energy-Efficient-Improvements-to-a-Property-by-Hiring-the-Right-ContractorsEfficiency Proficiency: The Importance of Hiring the Right Contractors for an Energy-Efficient Property

If you live in Texas you’ve likely seen (and felt) the rising cost of electricity that’s been happening since the “The Big Freeze” of 2021. It’s no secret that everyone has had higher than normal bills and while there are a lot of options to help reduce that with your power company (like free nights) updating your home can help too. Little things like properly venting your attic space to big things like swapping out your windows can all make huge differences to your electric bill each month and improve an energy-inefficient property. The trick here though is having the proper training and knowledge to do it correctly and that’s where Classic Construction comes in. We can spot opportunities to help maximize your savings, read on to learn more on how to make energy-efficient improvements to a property by hiring the right contractors.

Spotting Energy Efficient Opportunities

If your property or building is in need of renovation, you may want to take the time to look for places where you are losing energy. That’s money being thrown away! These days many building materials are made to be extra energy-efficient, from floor to ceiling. Places to spot where you may be losing “bought air” include your baseboards and flooring, around windows and doors, as well as the window material itself, and attics and roofing.

New energy-efficient windows are often double-paned with gas in between the panes as insulation, and many windows now have energy-saving tints, keeping AC in, and reducing heat from outside. It’s important to make sure all the seals are good and not crumbling. As buildings shift, your windows and doors may no longer be squared, so you can lose energy through tiny cracks around them.

Maximize Energy Savings

No matter what time of year it is, it’s smart to try to implement energy-efficient improvements throughout your home. From choosing the right windows that are properly insulated to choosing energy-efficient light bulbs for your home, the options are limitless!

Hiring a professional to help you decide the optimal ways to maximize your energy savings can be a great long-term investment, that will save you money on your electric bill for months and years to come.

Professionals are knowledgeable and can also help improve your property’s insulation to help the temperature stay regulated in your home. We also can easily add or renovate great tools such as a fireplace insert to give you natural warmth ambiance for the colder winter months. Remember, when trying to maximize energy savings, you should always have a professional analyze your home’s weak spots in order to prioritize your upcoming investments in energy efficiency.

An energy-efficient property doesn’t just have to be limited to smart appliances and solar – a well-versed contractor can find huge opportunities on your property that truly maximize the potential of the property itself and save you hundreds and even thousands over the lifetime of the property – well worth the investment.

If you’re restoring or remodeling your property, now is the best time to have the expert team at Classic take care of finding highly energy-efficient ways to improve your property! Reach out today for a free estimate!

pink bathroom

DIY Bathroom Remodel Tips

Bathroom remodels can be as simple as changing out paint, cabinet fixtures, and other cosmetic features, to installing new electrical components like fans and lighting, to installing and reconfiguring plumbing.

Where to Start

First and foremost, any homeowner should do research before jumping into a project. What do materials cost? Are there specific materials to avoid in a room that has a lot of moisture? Do you have all the required tools and skills? Often, you can find resources in construction and home handyman magazines and websites, as well as detailed how-tos on YouTube. Do your homework! Believe us, you don’t want to end up on a list like this.

pink bathroom
Do you have the skills and know-how to go from this…

Be Realistic With Yourself

Secondly, know your timeline. Too often, bathroom remodels seem like they’ll be simple only for the homeowner to realize he doesn’t have the budget, the skillset, or even the time to complete everything after demolition has started. Half-finished projects tend to linger as homeowners get used to the mess and put off finishing. That’s why only 31% of homeowners have successfully completed their DIY projects without problems – yikes! Set a realistic goal for having it complete, and call in help if you are stuck. https://nypost.com/2018/06/12/youre-not-the-only-one-putting-off-your-diy-projects/

Know Your Limits

The third and most important piece of advice is to know what’s outside of your ability and know when to call professionals. If you’re handy, you might be able to handle smaller tasks, such as installing new fixtures, painting, or even some light carpentry. Bigger remodels might require moving plumbing, repairing or replacing outdated or broken piping, and even electrical work – which can be incredibly dangerous if you don’t know what you’re doing. Make sure your general contractor is bonded, licensed, and insured for the type of work they’ll be doing.

remodeled bathroom
to this?

Why hire a professional?

Contractors can often get discounted bulk rates on materials, and being professionals, they can work faster too – sometimes with a team, which can save you money. They are also aware of what permits your area might require for the specific work you need done. The other benefit to hiring a professional, is they know best practices in terms of bathroom layouts and usability and can tailor your idea to a practical design that fits your specific needs.

Feeling overwhelmed by your remodel?

Contact Classic Construction & Restoration, Inc today for a free estimate for your bathroom remodel! We’re licensed, insured, and staffed by experts ready to serve for projects big and small!

Call today (469) 290-8980 or fill out a contact form for more information!

Man repairing wood floor with a hammer his right and a pencil in his hand.

When should I hire a contractor for my construction project? 

person-holding-pencil-1388944If you find yourself with a construction project that needs doing, you might be wondering when you should hire a contractor. This can be difficult to know since different types of projects will have different needs. If you’re a property manager or landlord with an angry or persistent tenant, the answer might be “yesterday.” But if you’re a homeowner looking to make upgrades or non-essential improvements, you’ve got time on your side.

In any of these situations, there are 3 main tasks you will need to add to your to-do list before you hire a contractor.

Determine when the work must be completed

Is this an emergency or a wish list project? Emergencies obviously require repairs today, while wish list items can wait. In any event, determine when the work should be completed. If it’s an emergency, you’ll need to move through these steps quickly. But if it’s a wish list project, determine which season would be best to have this work completed.

You’ll also want to be mindful of the construction industry’s busy seasons. The summer season is when many large projects are typically taking place because the lack of rain makes it easier complete a large amount of work in a short amount of time.

Contractors who can get large jobs scheduled are likely to do so in the summer. Large jobs are more difficult to schedule in the spring, fall and winter seasons, so smaller jobs such as leak investigations or interior repairs are more likely to be scheduled during this time.

Determine your budget and scope of work

This is pretty straightforward advice and probably the single most important item on your to-do list before hiring a contractor.

Before a contractor starts demolition on a property or making repairs, they need to have a plan for the work to be done. This is commonly referred to as a bid or an estimate and is where these two items come into play. A bid clearly outlines the work that the client (you) would like to see completed and lets you know how much the contractor expects to be paid for that work. Without a clearly defined scope of work or a budget on your end, you’re likely to overspend and not get what you thought you paid for.

Do your research


contractor renovation project gray-standard-color-book-near-green-eraser-159045Before starting a job, most contractors will submit a formal bid or estimate based on the scope of work and budget you’ve provided them. A good one will work with you and educate you on the price of materials and type of work you’re asking for to make sure you understand why they can or cannot do a certain type of work for the price you’re asking.

When doing your research, make sure you solicit bids from at least 3 different contractors. This will give you a range of price points to choose from, as well as introduce you to a few of the types of contractors you’re likely to encounter. You’ll learn a lot about the values, attitudes, professionalism and knowledge of the contractors while discussing or negotiating their bids with them.

If you don’t know where to start looking for a professional contractor, try the Better Business Bureau.

If you’ve already accomplished these three to-do items, give Classic Construction a call…we provide free estimates and we can do it all on time and on budget.

That’s Classic!