Beyond the Manager: Discover the Value in Your Management Company
We all want to get the most for our money, and your community association is no different. When hiring a management company, it’s easy to focus on the bottom-line price and not understand the differences in real value among the proposals you see. The right community association management company will provide you with so much more than a good manager.
David Readinger, executive director at FirstService Residential, explained that “baseline service” as an expectation is a thing of the past. “In the past, associations both big and small might have been fine with basic services: someone who can collect the fees, pay the bills, handle the contracts, create a general financial report and handle calls and emails. That’s not enough anymore,” he said.
Why isn’t that basic service enough?
What is it that today’s better educated, more sophisticated boards are looking for? “In the 10 years I’ve been speaking to prospective clients, the number one issue is lack of communication,” Readinger said. “That can mean the manager not getting back to the homeowners. It could mean that the manager is not communicating updates nor issues in a transparent manner. It could mean lack of availability of communication technology, poor writing skills or failures in communication from the board to manager and then manager to community. It usually boils down to the amount of time that the manager has to do the job.”
Readinger asserts that, when associations want to go with the lowest-priced option for management, they are likely to get a portfolio manager who is responsible for far too many communities. The more properties that a manager has, the less time can be spent on any of them. “I’ve talked to many boards who say ‘We have a manager, we like him, but he never gets back to anyone.’ Then I find out they are paying an extremely low price for their management services. The only way to pay that amount and have technology, company structure, education opportunities, board support and a career-minded manager – someone invested in certification and continuing education – is for that person to manage about a dozen properties in a portfolio. Of course they don’t have time to respond to anyone.”
What should associations look for in a management company?
Of course, a talented community association manager is critical.
But looking beyond that, it’s important to make sure that the management company has the ability to offer a depth of resources that includes:
- Board education to make sure everyone understands role and responsibilities
- Board education to make sure everyone understands role and responsibilities
- Continuing education opportunities for managers and other staff
- Cutting edge-technology that makes managing your community easier
- Customer care center that answers questions whenever needed
- Robust accounting services
- Service-focused culture
- Corporate support structure ready to assist management if needed
- Means to provide regular feedback on their services
- Database of standard operating procedures that will enhance services provided
- Access to banking and insurance programs that will save your community money while making the most of your budget.
What does that mean in the real world?
Readinger shared examples of communities that have been helped by transitioning to a management company with a structure and depth of resources to garner immediate results.
Readinger said described communities that are aging, “They are over 20 years old and are at the stage where they need major infrastructure replacement such as roads, storm water management systems, roofs, siding, lighting and sidewalks. Because we manage many communities, we are able to quickly bring in contractors eager to do the work. They know if they do a good job at a fair price, they’re getting the opportunity for additional work from our other managed communities,” he said.
Readinger described a 200 unit condominium association, in which the association had been managed by small local company for a long time, and basically existed in a vacuum. They had no technology to speak of – communication had to be handled by individual phone calls or a rudimentary email chain. Their financials were confused, with funds being posted in the wrong accounts. With no preventative maintenance plan in place, their infrastructure was in bad shape, so their property values were lower than surrounding communities. They had a very high rate of delinquency on condo fees and a high percentage of renters, which meant they couldn’t be FHA certified.
In response, Readinger’s team provided extra accounting services to straighten out the financials, a process which took several months. Community collection services reduced delinquencies by 80% in about six months. At the same time, his team invested in educating and training a brand-new board of directors. Now, after just six months, Readinger said he has received dozens of emails from happy homeowners and board members.
Another complicated case Readinger and his team helped turn around described a building that was a month from being condemned because it had failed a safety inspection. “They had deferred maintenance for so long, in an effort to save money, that an inspection revealed problems with stairs, railings, the roof and more,” Readinger said. “Condemnation would have meant people moving out, so we moved quickly to avoid that. We brought in contractors and created a maintenance schedule that would satisfy local authorities and keep people in their homes.”
As all of this was happening, Readinger’s team discovered that the association didn’t have the money on hand to pay for heating oil – and winter was a few weeks away. “Because of our size, we were able to negotiate with oil companies and set both payment and delivery schedules that worked for everyone,” he said.
His team had to jump in with both feet because all of these problems arose as the transition from a small local management company was happening. The local company had no board education, no technology solutions and no influence with vendors, but the lack of resources for management was the biggest problem. “It all comes down to time. Management doesn’t have time to get everything done, because they’re doing it the way it was done 30 years ago, and it takes longer,” Readinger explained. “If the owner of the company is still managing communities or producing client financial reports, they often do not have the time to properly coach and support their team, leaving the managers on their own.”
Price is important. But when looking for a community association management company, it’s just as important to look beyond the price, and beyond the manager, and assess the value of the company as a whole to make sure you’re getting the most for your association’s dollars.
To learn more about how a professional property management company can use its resources to enhance your property values and improve residents’ lifestyles, contact FirstService Residential, North America’s leading community management company.