On-site or Outsourced? Maintenance Options Need Careful Study

As buildings age, small and large maintenance issues arise, and HOA boards are called upon to address these situations. The questions frequently revolve around whether to use in-house staff or to hire an outside company to fix the problem. If the complex retains a management company—especially one that has its own maintenance division—the situation can become a bit more complicated.

Let’s look at a typical maintenance issue. Say the balcony railings on nearly all of the 20 units in a self-managed suburban condo complex are deteriorating and need to be replaced. The HOA has one maintenance person on staff and he has carpentry expertise, but he’s never replaced 20 railings at once. The board needs to make a decision. Should he be pulled away from his regular duties to fix the railings, or should the project be outsourced to a contractor? There’s no easy formula to apply, but rather a few commonsense questions to be addressed.

Sizing Up the Job

First, board members need to consider the size and complexity of the job, and the expertise of their staff.

According to Paul Santoriello, president and director of property management for Taylor Management in Cedar Knolls, “A lot of the issues that associations deal with are similar to what companies deal with when they look to outsource—the positives and negatives. Obviously, the first aspect that you're going to look at is what service it is that you need provided. The second thing is whether the job can feasibly be done by an outsourced company, and the cost-benefits associated with it—and there's more to that analysis than just what it would cost to use an employee versus what would it cost to hire an outside company.”

Wayde F. Scheffer, president of Access Property Management in Flemington, uses a two-column “decision chart” to determine whether projects in his company's portfolio communities can be handled in-house or outsourced to contractors.

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Comments

  • I as a Property management company have in-house maintenance and am able to handle anything property wise which comes across the desk. I, the owner have been in residential construction/maintenance for many years as a hands on person as well as project management etc. I have an owner whom feels it is a conflict of interest to allot me the work needed for remodeling properties when I can do it cheaper by far, and make sure it is done correctly. When I do not do the work and he out sources it, he expects me to control the project without paying me for it. I for one think that having in-house available resources is a blessing to a property investor. When the proper insurance is held, and all is in control by one person VS many, the work gets done to the very perspective it should be, and there are extremely fewer maintenance calls on properties. I believe it is a benefit that investors should seriously look at.