One of the most important factors in the decision to purchase a condominium or co-op is lifestyle. Many who live in residential communities, particularly those in single-family HOAs, choose community living over a single-family home for the convenience of what they don’t have to do: no snow shoveling, no grass mowing, and no cleaning the gutters or falling off the ladder while doing it. Like renters who can “call the super,” co-op and condo owners can do the same or call their managing agent. And like magic, things get done.
But what happens when there’s no managing agent? What happens when the property is self-managed, and the managing agent becomes you?
With outside management a typical characteristic of co-op and condo life, why do some associations and corporations choose to manage themselves? Often, it’s a matter of size. Management agents generally have a minimum monthly charge per building or per unit, and that charge can be more than the individual owners can handle. For the sake of argument, consider a building or association for which the minimum charge for management services is $500 per month. That’s $6,000 per year. In a 50-unit property, that would come to $10 per month and unit. In a 25-unit property, that would come to $20 per month and unit. In a five-unit property, the management fee turns into $100 per month and unit. That’s a big chunk of monthly common charges or maintenance, and it’s not tax deductible. So property size is the single biggest contributing factor to the choice to self-manage.
In addition to all that, another part of the appeal of managing oneself has less to do with money and more to do with community, regardless of size. “Most management companies would not be here on a full-time basis,” says Domenick Lorelli, former president of the Sonata Bay Club, an active adult community in Bayville, New Jersey, which has been managing itself since 1993. “There are two big benefits to self-managing: the first is that it’s cheaper, and the second is the accessibility and you know the people personally. A property manager is here only on a part-time basis. So you don’t have access to any answers or solutions to your questions or problems until they are on-site. Whereas with self-management, the people live here, and they are on site everyday of the week. They can be available to talk to, or if you have any problems you can come up here [to the office] and have them handled the right way.”
Another major consideration is what a particular property requires from a manager. A large multi-story, multifamily building with many amenities is more management intensive than, say, a small six-unit line of duplex units with no interior common areas and no amenities. So what requires the expertise of professional management. And what does the manager actually do?