Many condo and HOA boards are drawn to self-management, preferring to steer their communities without professional guidance. It's tempting! Initially, self-management seems to offer numerous advantages:
-
Potential for lower fees: Without management fees, assessments may be reduced, or funds reallocated to other needs.
-
Direct control: The board may feel they have a firmer grasp on day-to-day operations, including staffing decisions.
-
Increased resident involvement: Boards might think that homeowners may feel more engaged in community affairs when they have a stronger voice in planning and decision-making.
However, these benefits can come at a cost:
-
Risk of neglecting maintenance: While keeping assessments low is appealing, delaying or skipping crucial repairs to save money can harm the community in the long run, impacting property values and even personal safety.
-
Increased workload for board members: Total control means board members must dedicate significant time and effort, especially during major projects.
-
Potential liability concerns: The responsibility of hiring and managing staff can expose board members to legal risks.
-
Limited resources: Boards acting independently lack the resources and negotiating power that a management company can provide.
In today's environment, with labor shortages, inflation, and increased operating expenses, it's crucial for boards to have access to the right information and support. Partnering with a professional management company can equip your board with the expertise and resources needed to effectively manage your condo or HOA, ultimately enhancing the lifestyle and property values for all residents. Partnering with professional management can also uncover unforeseen sources of revenue, savings, and other benefits.
The Residences at Sandpearl Resort
For 12 years, the Residences at Sandpearl Resort in Clearwater Beach, Florida, thrived under the direction of a self-managed board. This 16-story luxury high-rise, with 117 units and stunning ocean views, offers amenities like a fitness center, swimming pool, social areas, and a lush tropical deck. However, in 2019, they were ready for a change; they looked into professional management options and selected FirstService Residential to streamline operations and alleviate the board's workload.
Jake Howse, director at FirstService Residential, remembers connecting with the Sandpearl board: “They were doing a good job at self-managing and things were running fairly well, but their bookkeeping company was underperforming and there were some opportunities the board wasn’t taking advantage of. As we learned more about one another, the board realized that we could offer much more than property management, like a bulk cable and internet program, elevator agreement, banking services and more.”
Howse and his team proposed proactive management services, tailored staffing solutions, thorough financial reviews and reports, an efficient invoicing system, access to banking and insurance resources, vendor management, new technology implementation, and a detailed plan to ensure a seamless transition for everyone involved. Howse and his team realized opportunities to help the board at Sandpearl move to the next level in ways no one expected. As those opportunities and challenges were uncovered, the board bought into changes and improvements they had never considered.
What happened next on their move from being self-managed to a professional management company?
Karen Lillie, community association manager at Sandpearl, now serving as a regional director, reflects on the community's early achievements with FirstService Residential. She's particularly proud of establishing a solid framework for the community's future success. "Regardless of who their FirstService manager is, Sandpearl now possesses comprehensive emergency management and hurricane plans, a detailed concierge manual, a proactive preventive maintenance plan, and staff training manuals," she explains. "These are dynamic resources that will benefit anyone managing the property."
Beyond this foundation of standard operating procedures and best practices derived from managing countless communities, Lillie and her team swiftly implemented other significant changes:
-
Financial optimization: FirstService Financial, the financial arm of FirstService Residential, conducted a banking analysis for Sandpearl, leading to $25,000 (each year!) in increased revenue through improved interest rates on bank deposits.
-
Cost savings: FirstService Residential meticulously reviewed the community's budget, line by line, identifying more than $10,000 in potential cost savings without compromising service quality.
-
Future planning: Management and the board prioritized a plan to fully fund reserves, ensuring preparedness for upcoming repairs and replacements of costly equipment and systems.
-
Enhanced amenities: A collaborative effort between the board and management led to a pool deck refresh, transforming the community's centerpiece with vibrant landscaping and umbrellas.
-
Major renovation: FirstService management teams orchestrated a substantial renovation for The Residences at Sandpearl, with a budget approaching $600,000. This included a new entrance, a complete overhaul of all interior spaces, updated fixtures and finishes, and new furniture throughout.
-
Guest experience: Management crafted a Clearwater Visitors Guide highlighting local restaurants, shops, and attractions, ensuring an engaging and enjoyable experience for Sandpearl's part-time residents and guests.
Michaella Gregg, who now manages Sandpearl for FirstService, says the board appreciates the increased consistency and professionalism brought by the transition. "Having a company supporting the manager makes a world of difference!" she remarks.
Gregg is already leaving her mark on the property. Notably, a privacy and security fence has been erected along the beachside boardwalk, and significant pool deck renovations are in the pipeline, as is a fresh coat of paint for the entire building. Additionally, the outdated metal water softener system has been replaced with a more durable fiberglass model.
While transitioning from self-management to professional partnership can be challenging, the benefits are undeniable. "Shifting focus from daily tasks to long-term strategy and vision can be a hurdle," Lillie acknowledges. "But once the board embraced the change, they thrived! They meet annually to chart the course for the coming months, confident in the knowledge that day-to-day operations are expertly handled. Ultimately, it's a relief to have a vast network of resources standing alongside the manager."
Considering a shift from self-management? Download our comprehensive guide to explore the risks and rewards of partnering with a professional management company.