Deciding to hire a real estate management company for your HOA is a big decision, but it will likely be the best decision you make regarding your property. It is a common misconception that an HOA has to be above a certain size or have a certain number of members to justify the cost of hiring a real estate management firm, but this couldn’t be further from the truth.
Oftentimes, smaller HOAs decide to self-manage the property to save money, but in exchange, they give up a significant portion of their time as it can easily become a full-time job. (Just consider how iPropertyManagement.com reports that “80 percent of property managers are involved in the coordination or performance of maintenance/repairs as well as rent and fee collection.”) In fact, they may even end up paying more in the long run.
Are you wondering if you should hire a professional or what to expect from a property management company? Here are just a few reasons why hiring a real estate management company, regardless of the size of your property, can improve every area of your property:
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Real Estate Management Companies Have Tons of Resources and Experience in the Field
Unless you already work for, or have previously worked for, a real estate management company, it is unlikely that you have experience in the day-to-day responsibilities of managing an HOA. While on the outside this may seem like something that is easy to learn. In reality, there are a lot of pieces to the puzzle and conflicting priorities can mount quickly. It’s property managers’ jobs to ensure that the pieces fit together and clashes don’t occur.
What do property managers do? Do property managers find tenants? Yes, but they also maintain the property itself, provide repairs when needed, ensure that the property remains connected to various service and utility providers, collect rent, file appropriate financial forms, and communicate with state and local authorities. If you don’t want to deal with that level of detail, you’d best say, “I need to look for rental property management companies near me.”
A Real Estate Management Company Can Actually Save Your HOA Money
Sometimes HOA’s balk at a property manager’s salary, but since most real estate management companies work with multiple properties, service vendors often give them discounted rates because they bring in a lot of business. This means lower annual maintenance costs for your HOA.
Additionally, real estate management companies typically have well-established relationships with vendors, meaning your HOA won’t have to waste time researching to find the best vendor to fit your needs. Finally, in some cases, property management services may cover more than tenant management and maintenance, such as security, which can help buffer your bottom line.
Staying Current on Local Laws & Regulations Regarding HOAs in the State
A real estate management company can ensure that your property doesn’t violate any regulations. Established property managers have both an academic and practical knowledge of landlord-tenant law, as well as other applicable regulations. In the long run this can save your HOA from paying out costly legal fees that could arise from non-compliance.
Consider the legal trouble your HOA could find itself in if you ask for too large of a deposit or appear to engage in discrimination when renting to new tenants, both of which are violations of established laws. In addition to the hassle of simply having to deal with a lawsuit, you mind find yourself on the hook for substantial damages.
HOA Rules and Regulations Enforcement
Self-managing an HOA will often put you in a difficult position with your neighbors who may also be your friends. Enforcing HOA rules and regulations means acting when the rules are violated and managing the inevitable homeowner complaints and disputes. The larger the community, the bigger the headache, but a real estate management company could take care of all of this for you. In addition, they also take care of the finances, meaning you won’t have to have any uncomfortable conversations with your neighbors about a late payment on HOA dues.
DIY Management Can Backfire on You
When considering the advantages and disadvantages of using a property management company, HOAs often acknowledge the time-management and expertise benefits of employing a third party, but balk at the perceived cost. But there are many times where trying to do everything on your own can backfire on you. Just consider the following scenarios:
- You don’t live near your property. Out-of-town or out-of-state landlords can quickly lose control of their properties, deferring maintenance, failing to promptly collect rent, and getting taken advantage of by unscrupulous tenants.
- You aren’t familiar with landlord-tenant law. We’ve already touched upon this risk in a previous section, but let us emphasize it once again: Not having a good grasp on the legal niceties of managing property can set you on a road to ruin very, very quickly.
- You have multiple properties. Management tasks expand exponentially with every new property you acquire. At some point, you will absolutely need outside help just to keep everything running.
- You want to expand the number of properties in your portfolio. The same point mentioned above holds true when you want to acquire more real estate. On the positive side of things, managers can help take properties off of the plates of ambitious owners, allowing them to expand. But framed negatively, trying to manage everything on your own while acquiring new holdings is a “great” way to lose your proverbial shirt.
- You don’t enjoy dealing with tenants. When tenants fail to live up to their end of the bargain (and they too often can), you’ll have to interact with them to receive your contractually obligated rent. If you don’t like doing that, you ought to get a property manager who does.
Time is Limited
One of the benefits of belonging to an HOA is not having to deal with day-to-day maintenance issues in your home. From maintaining the common areas and landscaping of your community to major repairs and finances, having a real estate management company will take a lot of issues off your plate and give you back your valuable time. Managing an HOA truly takes an enormous amount of time and is best left to real estate management professionals!