If you are a real estate investor and want to know more about Associations in real estate then this article may be very beneficial. Association in real estate investing refers to any group of people who are associated in a certain way or have a common interest or objective. In simple terms, it can be said that an association in real estate investing is an entity, which decides to engage in business or trade. In addition, an association in real estate investing also has to comply with the laws and regulations pertaining to the conduct of business and trading. In other words, to get into this business you need to be a real estate investor.
In general, there are two types of associations in real estate: limited and collective. In Limited Association, there is one governing board, which is elected by the members; the association is restricted in the matters it can do such as advertising, contracting, and buying and selling property, and cannot bind its members to any action or debt. Collective association on the other hand enables the members to bind each other; the members are allowed to have meetings but cannot bind each other in any way.
Generally, when you are starting out in this industry you may belong to one or all of these two types of associations; however, before you join you need to develop your marketing plan. The reason behind developing your marketing plan is because in real estate industry as things changes, you need to change with it or else you will fall behind others. The first step you need to take is to write a strategic marketing plan, which should consist of your membership details, objectives, strategies, marketing programs and methods, objectives of maintaining the membership and the expenses involved in the process.
Another important thing to do is to determine the areas of your association that are unmet need and create a strategy for meeting the unmet need. Most real estate associations have different requirements in terms of minimum equity as well as preferred rates. When developing your business plan you need to include these as part of your strategy. After developing a business plan you need to develop a management team. The management team should include the members of the association and their roles and responsibilities; the member should review and approve the business plan and the strategy.
It is generally better to have a non-profit association rather than a for-profit association as many for-profit associations will put pressure on the homeowner to sell out and become a member of that association. On the other hand in non-profit associations pressure from the association does not help but helps the homeowner as it gives the homeowner time to decide if they want to be a part of that association or not. Most homeowners who join homeowner associations are doing so because of the affordable monthly fees. They have fixed budgets set for their monthly fees and dues. The association usually wants to negotiate the homeowner’s rate into the mortgage terms.
There are various types of homeowner associations, some of them may include retirement and medical association, industrial property association, educational association and property management association. Each type of association has different membership requirements and different fees and dues. Some associations require the owner to pay an annual membership fee whereas others may require a fee-for-access registration. There are also independent associations which do not demand any membership fees for registration. If the association has its own board of directors, then their qualification also differs from independent association.