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Subject: Investment/finance questions

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MichaelJ3
(Virginia)

Posts:7

01/24/2008 11:06 AM
Our condo assocation has a T-note (value of approx 57K) with a percentage rate 2.7% which has a maturity date of 2/15/08 and just wanted to hear other persons idea on how you would proceed. Is it best to have it automatically renew or put it into other vehicles (such as an 18-month CD or IRA) and if so are there any that you would recommend. Also we are looking for alternative sources of funding to supplement our association reserves. Besides applying for loans or special assessments what other ways have you obtain funds?

RogerB
(Colorado)

Posts:3726

01/24/2008 12:10 PM
Michael, I have never found T-notes to provide a competative return. Today I obtained CD's at over 4% even with the 3/4% drop two days ago. Be careful because some banks are offering high rates because they need money to cover foreclosures on subprime loans. Currently Wells Fargo investment group is a candidate to consider. To increase your reserve funds the best long range method is to raise the annual assessment.

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GeraldT4

Posts:934

01/24/2008 1:44 PM
RogerB - Good advise on other more competitive investment opportunities. However, I believe the best long range method is for an association to continually explore its options to reduce discretionary spending and increase the reserve fund transfers from the maintenance fees collected first. There are a variety of creative solutions depending on the association and state. Perhaps instead of mulching every year, the association mulches every other year. Or try negotiating with the existing contractors, and or seek bids from a more broad range of contractors. If the association has the landscaper plant annual flowers, perhaps it can plant perennial flowers instead. Eg. plant Stella D'Oro lilies instead of impatiens, chrysanthemums, or begonias every year. Seek reimbursement from the municipality to the association for the municipality's cost for street lighting electrical, and the municipality's cost for snow removal. Don't know what laws are on the books in Virginia where Michael resides but here in NJ the link below says it all: http://www.njlawblog.com/2006/07/articles/community-associations/is-your-association-receiving-the-benefits-of-the-municipal-services-act/ The point is, explore all options to cut costs first.

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Forums > Homeowner Association > HOA Discussions > Investment/finance questions

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