Property owners who have investments in condo associations often struggle with the decision of whether they should self-manage the building or hire a professional property manager to do it. Before you make that decision, you really need to consider the pros and cons of both options.
Managing can certainly seem like an opportunity to save some money. You won’t have to pay a management fee every month to a third party. However, that’s sometimes deceptive and it can actually cost more to try and manage the property on your own. We often find the money people save in the management fee is lost with a lot of expenses you wouldn’t run into if you had a professional manager. There can be a lack of quality financial oversight, and if you don’t have strict financial controls in place, it’s easy to lose money. Deferred maintenance can also get backed up when you self-manage, which means routine expenses and repair work is ignored so long that the problem eventually becomes bigger and more expensive to fix. Most of the clean-up efforts we are involved in are in properties where an owner self-managed for a number of years, and all of the things that needed to be taken care of were not addressed.
Another thing people mention is that when they live in the condo complex, they can be present for any repair work that needs to be done. You might think that you’ll be available to meet the vendors who come to do work at the property. That can be true, but you have to remember that vendors typically work normal business hours. Unless it’s an emergency, they will schedule appointments between the hours of 9-5, on weekdays. If taking care of this condo association is your full time job, that will work out fine. If not, you’ll have to miss work or reschedule things going on in your own life just to meet a vendor. That can be problematic.
Unfortunately, the work that needs to be done to manage a condo association isn’t always fairly divided. Typically, a couple of board members end up shouldering most of the work and they usually aren’t paid for that work. That results in an unfair division of labor to take care of this building. Bringing in a professional property manager from the outside can fairly shift the load. Sometimes, when you decide to self-manage your condo association, the work just doesn’t get done. People are very busy, especially here in Washington, D.C. and Northern Virginia. That means the operations of the condo association just won’t be where they need to be. Financial oversights can occur and maintenance items get missed. You can also run into problems when members of the condo association are behind on their dues. That’s not the conversation you want to have with your neighbor on an evening or a Saturday morning when you both happen to be home.
Increasingly, we are noticing that lenders and buyers are wary of self-managed condo associations. They ask if the property is self-managed, and when we say that it is not, they are happy to hear it.
You may have additional questions on this topic, so if you’d like more information on managing a condo association, please contact us at Chatel Real Estate.