Having professional management, especially in these times of economic unrest, is more important than ever. With the continuing barrage of laws being passed related to our industry, combined with the statues already on the books, not to do so would be like going into court without an attorney, you can do it, but the results are usually poor and sometimes disastrous. The same can be said for continuing with the wrong management company.
You are ready to begin your search, now what? We will not go into all aspects of the search process as this is determined by your specific needs; however there are certain standards of practice you can follow to help with your choice.
Pricing or “When a Deal is not a Deal”
There are standard services that all management companies provide. The trick it to determine what you are really being charged. Some companies bury additional revenue streams, hiding the cost within extras like, violation notice fees, late notice fees, rebilling fees, collection fees and the list goes on. Don’t get us wrong we are not saying management companies are not entitled to be compensated for the work they do, we are saying you have a right to know what they are charging you for their services up front so you can make an informed decision.
Develop a list of services you need such as collections, violations, billing statements, etc. All the items it takes to run the day-to day operations of your community. Even the small items like postage can mount up quickly. Make a grid of these items along with the base management fee to determine your actual monthly cost from each bidder. (See Fig A) You know how many violations you have, how many delinquent home owners etc. estimate these numbers and compare. Although pricing should not be the only determining factor, it is the number one factor most Boards look at first.
Ask questions that help you to determine their quality of performance. This is a difficult area, most if not all the companies are going to promise everything under the sun to get your business. How well they perform day to day functions very difficult to determine until you hire their company. However, you can certainly ascertain their propensity for great service by asking the right questions. How soon after the end of the month will you receive your financial reports from the prior month? What is their service standard for returning telephone calls, emails, and correspondence? What is their policy for interacting with renters? What is their method for taking, tracking and following up on maintenance requests?
Ask for as much detail as possible and when you receive general statements like “we handle all email and calls in a timely manner” ask for more specifics and a commitment.
Don't be fooled, experience for the Manager assigned to your Community matters! Ask how many years of experience will the manager assigned to your community have? Many companies try to side step this question and/or do not have a manager selected yet. Years of experience, certifications and the continuing education model of the company will drastically effect their performance. There is a tool available on WWW.HOAADVISORS.COM to assist in the evaluation of a manager’s workload. Too heavy of a workload in their "portfolio" will definitely result in performance issues. Their workload is based on experience combined with the number of properties and types of properties they manage. Although all managers are not created equal and of course different situations apply, one thing is for certain, inexperienced, over-worked, over stressed and sometimes underpaid personnel never equates to better performance.
How many managers have left in the last six months? Having a new manager (less than a year in the industry) managing your affairs can definitely affect the time investment requirement of Board members. When possible ask to interview your potential choices.
And finally visit their corporate offices, professionalism starts there. Ask for, and check references. These will be selected by them of course, but they still may provide valuable insight in addition to what you have been told.
Good luck and happy hunting!