When it comes to condo association management, the phrase “you get what you pay for” certainly applies. To put it simply, when comparing costs, property management boils down to time, attention, and expertise. How much you pay in fees has a direct correlation to how much time and attention you’ll receive from your manager and their level of expertise in the field.
Now let’s dive in a bit further and look at the value in paying more for condo association management and some of the tradeoffs and implications of opting for “cheap” association management.
Even for the smallest condo association, there is a minimum amount of time required to properly manage the property. How much you pay in management is a direct correlation to how much time you receive from your Property Manager. Even before actual Property Manager costs, there are hundreds of dollars in accounting and administrative costs even for small associations, and thousands for larger associations. A Property Manager’s billable rate is between $120 – $165 an hour. How much of your property manager’s time do you want them to spend on your property? What you pay in management fees, is what you buy in time.
Attention is not just how much time your property manager spends on your property but how they spend that time. This is in contract review, project management, financial oversight, root cause analysis and resolution, and complex matters of governance. Details matter, quality matters. Being proactive, planful, thoughtful and doing it right the first time will always serve and benefit the condo association.
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A Senior Property Manager is a highly talented, trained, seasoned and experienced professional. Great Property Managers combine their talent and training with real-life years of experience. This is a professional services business, where talented managers navigate through the dozens of complex fields and disciples required to operate an association, and not only provide guidance to the association but also leadership.
Implications of “Cheap” Condo Association Management
When we say “cheap” property management, what we mean is low-cost, a fee structure that maybe seems too good to be true or is way below what you’re being quoted elsewhere. Here are a few tradeoffs to keep an eye out for with low cost, “cheap” association management options.
- Hidden Costs – If the costs aren’t upfront, they’re likely hiding somewhere else. This could be a “select” vendor pool which needs to pay the management company for the opportunity to bid on projects. Vendors only proposing the most expensive options, when less would be sufficient. All insurance policies being placed with a single agent. Question whether vendor and service provider relationships benefit you, the client, or the management company. You want your management company to work to develop the most appropriate scope of work, recommend the best vendors to bid on the job, and help the Trustees select the best fit and value to complete the work.
- Limited Bandwidth – If your manager has just enough bandwidth to get by, they will only ever be able to handle the “urgent” (think: fire, flood, storm, etc.) and never have time for the “important”. Things like proactive property evaluations, preventative maintenance, financial reviews, and capital plans. Great management includes a support team of directors, coordinators, and project managers.
- Manager Turnovers – New manager again this month? Low-cost management companies can keep costs down by primarily using lower-cost, junior managers. These entry-level roles are often piled with unrealistic workloads and when burned out, they’re swapped for another new entry-level manager. It’s a cycle you don’t want to be caught in the middle of.
- Trustee Workload – As a trustee, you shouldn’t have to spend your time overseeing and managing your Property Manager. A low-cost management company can’t allocate enough time for the manager to serve the property, so you will often need to step in and do things yourself. Great association management should make the lives of owners and trustees easier.
You Get What You Pay For
Your property is likely one of your single largest financial investments, and also, more importantly, it is your home. In management, just like everything else in life, you get what you pay for. If you want to pay as little as possible for management, you will not get good services.
The professional oversight and guidance for your property should be entrusted to a seasoned and talented professional. Someone who is able to provide the time, attention, and expertise to not only manage but truly lead your association.