6 Ways Professional Property Management Affects Your Bottom Line
Partnering with a professional property management company is the next step to take your community to the next level. The right property management company will work with you, letting you direct the vision and goals for your community while they take on the day-to-day execution of that vision.
Many boards are understandably leery of the costs of partnering with a property management company, but those costs may be a lot lower than you think and offset by other savings. Check out the ways that a property management team can improve the bottom line for your association.
1. Your other costs should go down.
“Self-managed boards pay a manager. They’re looking for a great manager, and often unintentionally over pay that person by as much as 50%,” explains Arthur Bartikofsky, senior vice president, high-rise division at FirstService Residential. “Then they have to hire a bookkeeper and accounting firm or an accountant, payroll services to handle the taxes and deal with benefits like healthcare. We do all of that in-house, and I’ve seen cases where bringing those services under one roof covers our management fee. Every other savings is on top of that.”
A good property management company will tell you if you’re getting the best rates for things like insurance, banking, trash removal, landscaping, cable and even utilities. They’ll have the ability to find the best values for your association by benchmarking against similar properties, saving you money or getting additional services for the same fees.
2. You can stop doing the work of an employer.
Perhaps one of the most effective tools to mitigate risk in your community association is to cease being an employer. Workers’ Compensation insurance, background checks, annual performance reviews, improper termination, harassment and unemployment insurance, among other employer-related issues, can quickly become very expensive. Think about employee turnover: some studies suggest that it costs 6 to 9 months of that employee’s salary to replace them. Other studies put that number at twice the employee’s salary! Either way, that cost belongs to the management company.
3. You’ll improve property values.
When you bring in a professional property management company, you have access to resources you might not have before, like dedicated accounts payable and accounts receivable teams and technology that includes both a mass communication tool and online payment portal.
Those specialized roles and tools free your manager to focus on things like preventive maintenance, painting, street upkeep and other issues that directly affect your property values. People want to live in a beautiful, well-kept community or building, so these efforts immediately make property more desirable in the market…more valuable.
4. You could save in ways you didn’t anticipate.
A professional management team will analyze your entire budget and look for ways to save you money, now and in the long term. Changing the way you manage your association’s bank accounts can quickly recoup savings in fees and revenue from better interest rates on reserves.
Energy efficiency can be both a short- and longer-term savings strategy. A small investment in LED lighting can save a lot of money very quickly. Fine-tuning boiler systems, replacing inefficient air conditioning units or other equipment with more energy-efficient ones, improving insulation or replacing windows can save your association money in the long run while reducing your carbon footprint.
5. Delinquencies will become revenue.
Collecting association dues and violation fees is one of the toughest jobs for any association. It can be an unpleasant job, especially when you’re dealing with neighbors (and potentially, your friends). A property management company keeps it purely objective and professional and can help facilitate debt collection services.
6. Your residents will feel more connected.
Does your community vision include lots of amenities and activities? The right management company can offer experts who help you bring that vision to life. They’ll look at your culture, help you survey the residents and design and execute programs and activities that your residents want and will love. Your residents will feel more connected to one another and to the community too. Happy residents stick around, lowering turnover, which is ultimately good for everyone’s property value.
Managing a community is a lot of work. Hiring a professional company that will truly partner with your board, carrying out your vision, can alleviate much of that work while improving your association’s bottom line at the same time. You get to stress less and enjoy your home and neighbors more!
For more on transitioning from a self-managed community to one managed by a professional company, or for real case studies on communities that have done so, contact FirstService Residential.