Should Your HOA Hire a Management Company? – Five Things to Consider

If your association is considering a management company, there are many variables that need to be considered before making the decision. In this article, we will review some of these factors and how to weigh them during the decision-making process for your homeowners association, condo association, or townhome association.

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If your association is considering a management company, there are many variables that need to be considered before making the decision. In this article, we will review some of these factors and how to weigh them during the decision-making process for your homeowners association, condo association, or townhome association.

 

How to Choose the Right HOA Management Company

 

1. Budget

You may find that the current budget level isn’t a great indicator of whether you should hire a management company or not. If you live in a seven home single-family HOA with no amenities this will likely be the deciding factor, but if you are not in that position you might find that a management company is worth far more than its price as they can often generate a lot of additional revenue and help the community save a lot of money as well.

At times, an association may have a very tight budget when hiring a management company and find six months later that they have created a good amount of savings for the community. Raising dues to match association expenses, collections, and vendor selection/management are just a few ways management companies can be worth much more than their management fee to your association.

 

2. Maintenance

A certified and experienced manager knows when vendors are charging too much for the scope of the work. They will gather quotes from reputable companies based on an accurate scope of needs and ensure the work is done properly.

Community associations can lose a lot of money hiring the wrong vendor and not managing them properly. A management company can help ensure community association funds are not being wasted. Also, the sheer amount of work involved in managing this process may require more time than the board of directors have on hand.

 

3. Board Experience

Newer communities or communities with lots of board churn may require a helping hand and a source of education when it comes to managing a community. It is extremely beneficial for new board members to have someone to talk to and resources to draw on when tackling complex issues in their association.

 

4. Receivables

As mentioned above, a prudent collections process is necessary for ensuring your community succeeds. Management companies not only alleviate some of the drama that can come from “neighbor to neighbor” collections but also work hard to monitor collections and make sure people are being held accountable to the HOA rules they agreed to when they moved in.

In some cases, management companies can collect hundreds of thousands of dollars in unpaid dues in their first year of management. If you’re having issues with collections, you might want to talk to a management company about how they can help collect the money owed to the association while alleviating a lot of the issues coming from board members trying to collect dues directly.

 

5. Enforcement

Another source of drama within a self-managed community is violations enforcement. Having a management company driving the community to find violations and managing that process not only alleviates drama compared to self-management, but also improves the overall look of the community.

 

For more information on how a qualified management company can help your community, simply visit HPS Management and fill out the contact form. We would be happy to meet with your board of directors to see if professional management is right for your community.

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