Should I hire a property manager? A strategic approach for your Nevada association’s future

Should I hire a property manager?

When it comes to hiring an association management partner, cost is often the first consideration for Nevada association boards. But before focusing solely on the price tag, it’s essential to look at the bigger picture. Self-managing an association can incur hidden costs that might outweigh the benefits. These hidden costs may lead you to pose the question, "Should I hire a property manager?" Here are six factors to consider before deciding between self-management and partnering with a Nevada property management company.
 

6 factors to consider when hiring a Nevada property manager 

1. Time: The cost of volunteer work

   Board members are often volunteers with full-time jobs, and spending hours each week on association matters can quickly lead to burnout. An association management company can take over time-consuming tasks like meeting organization, vendor management, and daily operations, allowing board members to focus on high-level decisions and strategic planning.
    

2. Risk: Avoiding expensive HR pitfalls

   Managing HR duties without management company support exposes associations to potential risks like labor law violations and discrimination claims, which can result in costly fines or lawsuits. Property management companies handle HR functions and ensure compliance with all applicable laws, preventing these costly issues.
   
   For instance, a 3,550-unit master-planned community determined that they were spending an average of $75,000 to $100,000 a year on legal fees just for HR-related services. After partnering with FirstService Residential, this fee was removed because their associates transitioned from association employees to property management employees, eliminating the cost of third-party HR services. The association’s 45 employees also gained access to training and development, extensive benefits, and a local support team.
    

3. Size: The advantage of scale

   FirstService Residential has the power to negotiate better rates on utilities, insurance, and contracts due to our extensive portfolios. Self-managed associations often lack this negotiating leverage, which can result in higher costs for essential services. An association management partner can provide savings that a self-managed association would likely miss.
    

3. Reputation: Enhancing the resident experience

   Creating a desirable community requires more than just maintenance; it takes a strong focus on resident experience. A community management partner can offer specialized lifestyle services such as event planning, concierge services, and wellness programs. These services elevate the overall living experience and help boost your Nevada association’s reputation, which is key for attracting new buyers and retaining existing residents.
    

5. Finances: Expertise in budgeting and accounting

   Managing complex finances, such as budgeting, accounts receivable, and reserve planning, can be challenging. A professional management company provides dedicated financial expertise, ensuring that your association stays on track with budgeting, reduces delinquencies, and addresses unexpected financial challenges efficiently.
    

6. Unlocking new income streams

   Partnering with an association management company can also help uncover potential revenue opportunities. From monetizing amenities like event spaces to optimizing reserve funds, a professional team can provide guidance that boosts your Nevada association’s finances.
   
   FirstService Residential-managed associations have access to dedicated financial services affiliate FirstService Financial, which offers a reserve program, insurance products, and lending services, to name a few. Its cash management team helps tailor short- and long-term strategies for each association’s unique needs, with the goal of replacing lower-rate funding accounts (brokerage-based money market accounts, sweeps, etc.), reducing ongoing security and tracking burdens, improving asset liquidity, and maximizing interest revenue.
   
   For instance, one master-planned association decided to partner with FirstService Residential after a financial audit revealed they were earning minimal interest on their reserve funds ($1,000 in annual interest from $1.5 million in reserves). After hiring FirstService Residential and getting a full banking analysis through FirstService Financial, they increased their interest to a projected $75,000 per year.

Final thoughts

When weighing the pros and cons of self-management versus partnering with a Nevada association management company, it's crucial to look beyond the initial cost. While management fees may seem high at first glance, the savings in time, reduced risk, financial support, and revenue opportunities could make a management partner the more cost-effective choice in the long run. So the answer to your question, "Should I hire a property manager?" is, yes!