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9
Posted byu/[deleted]2 months ago

Property Management Company: Pros/Cons

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35 comments
91% Upvoted
level 1
· 2 mo. ago
💼 CAM

There are a million reasons to hire a company over an individual employee...

  1. Less worrying about the laws being an employer.

  2. If an employee leaves you have a smooth transition.

  3. You don't just get a manager, you get an accounting department, etc.

  4. Manager is supervised by experts in the field, not just Board members.

  5. Management companies can lighten numerous loads for the Board.

  6. Management companies bring with them software that makes running an HOA easier.

  7. Reduction in workers comp insurance.

  8. Not handing accounts receivable directly.

  9. Not handling accounts payable directly.

  10. People who know others in the industry when you need a referral.

Just a short list.

19
level 2

To add to this.

11. Hiring a property management company means you get their expertise when it comes time to hire a contractor to fix something. They know who does good work and who doesn't. And a contractor with a good history with a property management company is unlikely to do something stupid and endanger their reputation.

12. A property management company likely has a lawyer or two on staff to consult with on issues that an HOA board would not. And let's not forget tax returns and other compliance issues.

3
level 2
· 2 mo. ago
🏘 HOA Board Member

very well said.

One thing I would add to OP regarding negative past experiences. It doesn't matter if the employee is internal or external. What matters is the culture and expectations set by the board. If you view your property management as a partner, not as a vendor, and emphasize a culture of serving residents vs. the often adversarial view of some people, you are likely to have a positive experience.

If costs are a concern, you really should look to have a solid budget and a reserve study. Property Management firms can have a range of services and price points. I'd suggest the board know up front what you can spend and what services you expect before you start your search. But since professional firms bring tools, processes, automation, etc. you often use fractions of a person, making it not only better service, but often cheaper than doing ti all yourself.

1
level 2
· 2 mo. ago
🏘 HOA Board Member

I would have never even possibly entertained being a board member if we didn’t already have a management company! And we are just a 110 townhome community, not 1000! I’ve got a full time job, there’s no way I could stay on top of our finances, do violations, taxes, etc etc.

2
level 2
· 2 mo. ago
💼 CAM

And over all less of a headache for thr board

1
level 1

Our association was self-manged for the first 20 years.

In that time (LONG before I bought in), the board kept the dues low because "not everyone can afford an increase", deferred maintenance on important things and completely ignored the Reserve Study.

It's taken the last 22 years with an outside Property Manager to get things going in the right direction. We still aren't where we should be regarding the Reserves and with maintenance, but we would have never gotten out of the deep hole if we stayed self-managed.

9
level 1

I would interview a few. Get bids.

Also advertise for a new manager at a competitive salary. Do the math and present both options to the board. Either way can be good/bad depending on the folks that actually do the property management.

2
level 1

The direct relationship of assessments to costs of property management I don’t think has a Correlation.

Also one person can not effectively manage a community of that size - a company will bring to the table efficiencies that one person just can’t do.

1
level 2
· 2 mo. ago · edited 2 mo. ago

There absolutely is a correlation if the additional cost incurred by hiring a property management company is not saved elsewhere.

Then we’ve found unicorns I guess. It’s worked for 30+ years.

2
level 1

Hired a major national company based in NJ.

They did/do not store our financial records as mandated by law and our contract.

They bid 90% of jobs to their in-house maintenance division which cannot perform reliable, industry standard work as dictated by our contract. We've paid about 200k a year for the past five years to this division and we're facing four member lawsuits (189 unit complex) from the work they've done this year alone. The branch manager who our community manager reports to told a resident "go ahead and sue, I don't care and I like going to court."

The head of maintenance walked out of an inspection with our community manager and a home owner because they wanted him to redo what he messed up. Just walked out, got in his car, and drove away.

Our app has about one comment per month asking how to file a request as it takes weeks to hear back from them.

They do not vet or store insurance and license information on contractors as our contract states they will.

While our reserves plunged to less than 100k they recommended a license plate reader for 3700 and our idiot president got it pushed through.

We have had four managers with this company in less than five years.

We have identified six clauses of their contract they are in irrefutable violation of. They have made no effort to correct this despite being told about it repeatedly.

We're looking at reverting back to self-managed but the current board wants to do as little as possible so they're trying to block it while insisting they remain board members. It's a total shit show at this point. Be careful!

1
level 2
· 2 mo. ago
💼 CAM

Unless you are a multi thousand unit, gated, resort property don't hire a management company with their own maintenance company.

2
level 2
· 2 mo. ago
HOA owner

Half of those items are the board's responsibility, not the PM.

Reserve levels, creating a license plate reader, allowing the PM to violate their contract clauses- those are on your board.

You don't indicate the number of homes but if it's more than a handful and I was on this board I'd want a professional property manager in place too. It's not that I'm lazy but because it's not the board's job to run the property- it's their job to oversee those who run the property.

1
level 1

Watch out for self serving managers who use their own ground maintenance company. Are you all in discrete homes where each home owners maintains their own home = very few common elements. Watch out for companies that establish rules and issue tickets to homeowners = costs you nagging fees for extra cars etc because they often add a $10-25 fee for the letter - which they keep.

1
level 1

Oh god. I have 220 units and I would implode if I didn’t have a PM.

1
level 2

Yeah, I think my original post may have been unclear? We have (had) a PM but he was an employee of the HOA. My question was around the pros/cons of hiring a company rather over a HOA employed manager again.

2
level 1

Pro: get your life back

1
level 1

Depends on the manager….. you get what you pay for.

1

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