Figuring Management Fees Any Size, Shape or Color

When you buy a used car, you don't just walk into a dealership without doing any research beforehand. You don't just plunk your hard-earned cash down on the counter, tell the salesperson, "Give me that one," and then drive away with no questions asked.

Of course if you did do this, you'd have one happy salesperson on your hands—but you'd hardly be a smart consumer. Without incorporating factors like make and model, special features, mileage, and safety rating into your deliberations, you might end up blowing your budget and overpaying—or worse, driving off the lot with a lemon simply because you didn't do your due diligence.

The same is true of property management companies. How much a property management firm charges an association for their services will depend on a number of factors as well—and not every company is a good fit for every association community. It can be helpful to understand what variables property management companies consider when determining their fees.

Level of Service

One of the first variables to consider, says Diane Dangler of DHD Management Company in Ocean Port, is the level of service your association needs. "For example, is the association looking for someone to work on-site—which would cost more—or offsite which could save money?" she asks. Dangler adds that in addition to whether your HOA requires a full-time manager, the number of ancillary staff members necessary to maintain the property would also be factored into the total.

To help save money during this negotiating process, the first thing a board should do is analyze exactly what tasks need to be done to manage their property. Management professionals advise making a list of things like collecting common charges, cleaning empty units and possibly renting them, and handling repairs, snow removal and landscaping. With that information in hand, you'll be better prepared to discuss your HOA's needs and expectations with a prospective manager—or to renegotiate your current management company's fees.

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Comments

  • Do on-site property management companies normally get paid for overtime services (i.e. a fire in the building required help after hours)