Property Management Fees

I am soon to be president of an association and our mgmt. company charges us $12,000 per year for 58 older units. If I divide correctly that is 206.90 per year and 17.24 per month per unit. My opinion and not knowing the CA market, your fees to you company are high...have you thought about putting management out to competitive bid?

If my math is not "off"... this sounds like ~21% of dues goes to your mngmt company.

Doing the math on ours in Northern Va...we have 300 units. We have a mngmt company payments but we also pay separate payments for pool and racquet club. Since the same company maintains the pool,etc. the dues are paid in one lump sum by owners.

The management is ~9% and the club is ~10% of the dues. In total this is not far from yours.

The question is... does your fee include a pool and tennis courts?

I also live in NC and am curious where your association is located? We are exploring the idea of having a property manager and I am doing the research. Any info you can share would be greatly appreciated.

PaulineB

Management fees do vary from company to company, as well as association to association under a single company. There are several factors that can influence a higher or lower management rate, and these factors should be kept in mind when shopping management companies for the best rate.

Here are just a few that I use when figuring the percentage to quote for a management contract:

Total Number of Units - This will be a good indicator of how much time a manager will be required to invest in running the association. Processing a dozen checks a month isn't a big deal, but a few hundred will probably condone a higher percentage.

Average monthly delinquencies - As with processing dues payments, a large number of collection notices to send out each month will require a larger time investment from the manager.

Average number of monthly service/repair calls - Again, this is another concern when it comes to time invested. As a policy, I inspect all work performed on the common elements in person before the invoice is paid. This ensures that the work is performed to the satisfaction of the homeowner and/or association before the funds are released. I'm not a fan of paying for a job and then having to beg for a touch up. Contractors are much more apt to correct a situation quickly if they are waiting to be paid.

Amenities - Some amenities require more of the manager's time, such as docking facilities. The docks that I deal with are availible to homeowners who rent them on a monthly or annual basis, and the dock accounting is kept seperate from the operating and reserve accounts. Not all associations will handle such facilities this way, but it is something that must be considered when deciding what to charge for management services.

There are several other factors to take into account, but hopefully you can see what I am getting at. As you can see, my quote process is largely time-based, and we all know time = money. When you're working for a flat monthly rate, the more hours spent on one association means less money for your work, and less time for your other association contracts.

I'm sure other managers here have different ways of doing this, as there really isn't a one-rate-fits-all answer to the management fees question. Usually, I will initially quote 10% as a starting point before I've had a chance to look over the financials, then adjust for the final bid depending on the nature of the beast.

Any other managers (Roger?) care to give some insight into what influences their management fees?