If you’re on the Board of a condominium, high-rise or homeowners association, you know that keeping your association’s finances healthy is one of your chief responsibilities. Keeping high levels of service while trying to save money and get the best deals possible is a hard line to walk. While any amount of savings is a win, what if you could save a lot? Like one association that saved hundreds of thousands of dollars in landscaping costs? Or the one in Tampa that is saving tens of thousands each year on its electric bills?
Taking a close look at communities that have been able to save significantly, we found one commonality. No matter the size or property type, communities that saved a considerable amount of money all had a partnership with a quality property management company.
If your community is currently self-managed, you may see bringing in a property management company as spending more money, rather than saving it. Check out the numbers below – working with a quality property management company can save enough in other areas to outweigh those initial expenses.
If you already work with a property management company but aren’t satisfied with the value you’re getting, you may discover some tips below, things that your management company should be doing to maximize your operating budget and keep your association fiscally fit.
The right property management company should undertake the following:
1. Perform proactive cost-benefit analyses.
Is it more cost-effective to keep janitors in-house or contract a third-party service? What about engineering and pool maintenance services? A professional property manager at FirstService Residential had these same questions when she created an in-depth cost analysis between these two scenarios for a community she managed. She discovered that, in their case, hiring in-house staff could save money for the community while also increasing service hours AND the number of employees available to serve the community at one time. Not only did she present the findings to the Board, she then worked for months hiring and training a united and qualified team for the community.
This is the kind of proactive, personalized service the best property management companies should be offering your community. What was the total cost savings for the community? Over $25,000 in hard costs per year including future added value. This new in-house staff means more regular maintenance, which lessens the frequency of equipment breakdowns and reduces the need for more costly, larger repairs.
2. Negotiate rates with the best vendors.
It takes time and effort to vet different vendors, create and send out RFPs, interview potential partners and select those who best fit your community – not to mention the additional stress of the financial negotiations that take place once a vendor has been chosen. Oftentimes the vendors that seem like a great deal at first end up nickel-and-diming you as the project progresses. Or worse, some vendors may meet their negotiated price, but not complete the job properly, on time or may under deliver in terms of customer service.
The right property management company has built strong, long-term relationships with the best local and national vendors. This community association management company should also have vast expertise at negotiating better rates and scoring value-added savings. FirstService Residential’s Value Engineering department, for example, examines vendor contracts to find places that communities can save money through negotiated pricing or get better service for the same money. One community in particular, was able to save a total of $264,000 per year by carefully reevaluating many of the community’s contracts. From janitorial service to security to insurance, the team was able to secure lower rates from the community’s vendors, without sacrificing quality or service.
3. Seek out grants for your community and apply for them.
Are there projects that your community desperately needs but you have been putting them off due to lack of funding? Did you know that there are often federal, state, municipal or private organizations that offer grants for residential community improvements? Expensive items including arboreal work, beautification and energy-saving construction projects may be eligible for grant funding.
While grants are publicly available, the appropriate ones take time to find, and usually include a notoriously complex application process. The right property management company will know where to look, and will take the time and effort to do what it takes to secure a grant for your community improvements.
4. Look for ways to save on energy costs.
FS Energy, the energy management affiliate of FirstService Residential, will conduct an energy audit of your buildings and see if you can save money on energy costs. Skypoint, a high-rise in downtown Tampa, has already saved tens of thousands of dollars in energy costs by replacing all of the lighting in many common areas with more efficient and effective means of lighting. The energy savings not only paid for the update, they earned Skypoint an award from the Florida Public Service Commission
These are just a handful of examples of how communities are saving thousands of dollars annually, thanks to partnering with a professional property management company. To find out how the experts at Florida’s leading property management company can help your association stretch its dollars, contact FirstService Residential