Small Community Management Fees

RoseM9 (Texas)
Posts: 22

Posted:

Good Morning,

We have been asked to bid on a new community that is quite small (only 30 homes, no amenities, no gates). I'm having a hard time seeing what makes sense for homeowners and management alike on a single-family home subdivision of this size since there are so few homes to allocate costs to.

Does anyone have feedback on how to best serve the smaller communities while maintaining a fair price for the homeowners?

Many thanks from a new MC.

LetA (Nevada)
Posts: 2,679

Posted:

There are a lot of HOA's like this here in Vegas. When I was house hunting ten years ago I was seeing HOA fees in some neighborhoods of $12.00 to $16.00. Those are simple portfolio accounts, kind of like
out of sight out of mind. Very little to no headaches for the PM or the homeowners. These neighborhoods are public streets, no amenities, very little to no landscaping, maybe a few shrubs and crushed gravel
for "common elements. Expenses would be very minimal, hence the low HOA assessments.

AugustinD
Posts: 3,698

Posted:

RoseM9, it seems to me that you have to be fair to yourself and your business. If what the HOA can pay is not worth it to you, then explain to the HOA why, and let the board ponder the situation. It may be that smaller HOAs are stuck with having to pay meaningfully more per owner due to a loss of economy of scale.

HenryS7 (Pennsylvania)
Posts: 336

Posted:

Quote:

Posted By RoseM9 on 12/02/2021 6:08 AM
Good Morning,

We have been asked to bid on a new community that is quite small (only 30 homes, no amenities, no gates). I'm having a hard time seeing what makes sense for homeowners and management alike on a single-family home subdivision of this size since there are so few homes to allocate costs to.

Does anyone have feedback on how to best serve the smaller communities while maintaining a fair price for the homeowners?

Many thanks from a new MC.

A small association might benefit from an accounting only package where they hire you for accounting services, and take care of everything else themselves.

The big ticket item for them is likely to be compliance. Do they want to handle it themselves or do they want a proper manager to handle it? Accounting only won't work if they also want you to handle compliance.

Compliance, accounting, and part time secretarial services are what we pay for. We pay $30k a year for these and we have 274 homes. I'm dubious if we receive $30k annual benefit, but we don't want to self-manage compliance, so we have to pay the cost for this.

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By HenryS7 on 12/02/2021 7:57 AM

Posted By RoseM9 on 12/02/2021 6:08 AM
Good Morning,

We have been asked to bid on a new community that is quite small (only 30 homes, no amenities, no gates). I'm having a hard time seeing what makes sense for homeowners and management alike on a single-family home subdivision of this size since there are so few homes to allocate costs to.

Does anyone have feedback on how to best serve the smaller communities while maintaining a fair price for the homeowners?

Many thanks from a new MC.

A small association might benefit from an accounting only package where they hire you for accounting services, and take care of everything else themselves.

The big ticket item for them is likely to be compliance. Do they want to handle it themselves or do they want a proper manager to handle it? Accounting only won't work if they also want you to handle compliance.

Compliance, accounting, and part time secretarial services are what we pay for. We pay $30k a year for these and we have 274 homes. I'm dubious if we receive $30k annual benefit, but we don't want to self-manage compliance, so we have to pay the cost for this.

This is interesting. People, unfortunately maybe a majority, in my self-managed POA are wanting a management company. They are stuck on Realmanage, a large, several states, company, which bid $1100 per months total for 56 lots, and shy of 50 houses. No common property, no employees. It is pretty much as the original poster described one. So all we would get is accounting, which per the recent treasurer is about 5 minutes of Quickbooks entry per month, and compliance (which is the main/only reason why the people want it.) Based on being almost half your expense but only 20% of the houses, it seems we would be getting riped-off.

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By RoseM9 on 12/02/2021 6:08 AM
Good Morning,

We have been asked to bid on a new community that is quite small (only 30 homes, no amenities, no gates). I'm having a hard time seeing what makes sense for homeowners and management alike on a single-family home subdivision of this size since there are so few homes to allocate costs to.

Does anyone have feedback on how to best serve the smaller communities while maintaining a fair price for the homeowners?

Many thanks from a new MC.

Hi Rose, I tried to send a private message to you but cannot find a way to do so. Please read my post above. We are outside Houston, near Katy. Do you manage in this area?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By RogerJ1 on 12/02/2021 11:08 AM

Posted By HenryS7 on 12/02/2021 7:57 AM

Posted By RoseM9 on 12/02/2021 6:08 AM
Good Morning,

We have been asked to bid on a new community that is quite small (only 30 homes, no amenities, no gates). I'm having a hard time seeing what makes sense for homeowners and management alike on a single-family home subdivision of this size since there are so few homes to allocate costs to.

Does anyone have feedback on how to best serve the smaller communities while maintaining a fair price for the homeowners?

Many thanks from a new MC.

A small association might benefit from an accounting only package where they hire you for accounting services, and take care of everything else themselves.

The big ticket item for them is likely to be compliance. Do they want to handle it themselves or do they want a proper manager to handle it? Accounting only won't work if they also want you to handle compliance.

Compliance, accounting, and part time secretarial services are what we pay for. We pay $30k a year for these and we have 274 homes. I'm dubious if we receive $30k annual benefit, but we don't want to self-manage compliance, so we have to pay the cost for this.

This is interesting. People, unfortunately maybe a majority, in my self-managed POA are wanting a management company. They are stuck on Realmanage, a large, several states, company, which bid $1100 per months total for 56 lots, and shy of 50 houses. No common property, no employees. It is pretty much as the original poster described one. So all we would get is accounting, which per the recent treasurer is about 5 minutes of Quickbooks entry per month, and compliance (which is the main/only reason why the people want it.) Based on being almost half your expense but only 20% of the houses, it seems we would be getting riped-off.

$30K per year for 278 homes is $9.12 per month, per home. Not an outrageous amount depending on the services given.

RogerJ1 (Texas)
Posts: 550

Posted:

Quote:

Posted By JohnC46 on 12/02/2021 11:16 AM

Posted By RogerJ1 on 12/02/2021 11:08 AM

Posted By HenryS7 on 12/02/2021 7:57 AM

Posted By RoseM9 on 12/02/2021 6:08 AM
Good Morning,

We have been asked to bid on a new community that is quite small (only 30 homes, no amenities, no gates). I'm having a hard time seeing what makes sense for homeowners and management alike on a single-family home subdivision of this size since there are so few homes to allocate costs to.

Does anyone have feedback on how to best serve the smaller communities while maintaining a fair price for the homeowners?

Many thanks from a new MC.

A small association might benefit from an accounting only package where they hire you for accounting services, and take care of everything else themselves.

The big ticket item for them is likely to be compliance. Do they want to handle it themselves or do they want a proper manager to handle it? Accounting only won't work if they also want you to handle compliance.

Compliance, accounting, and part time secretarial services are what we pay for. We pay $30k a year for these and we have 274 homes. I'm dubious if we receive $30k annual benefit, but we don't want to self-manage compliance, so we have to pay the cost for this.

This is interesting. People, unfortunately maybe a majority, in my self-managed POA are wanting a management company. They are stuck on Realmanage, a large, several states, company, which bid $1100 per months total for 56 lots, and shy of 50 houses. No common property, no employees. It is pretty much as the original poster described one. So all we would get is accounting, which per the recent treasurer is about 5 minutes of Quickbooks entry per month, and compliance (which is the main/only reason why the people want it.) Based on being almost half your expense but only 20% of the houses, it seems we would be getting riped-off.

$30K per year for 278 homes is $9.12 per month, per home. Not an outrageous amount depending on the services given.

Our proposal for same situation, but 56 lots, is $1010 or 1100 per month (both quotes have been cited so not sure which is correct), which is $18 to almost $20 per lot average, more than twice as much.

MaxB4
Posts: 3,513

Posted:

First, a management company should have a minimum price for which you charge for services. A supposed industry standard is $10.00 per door for detached communities and $15.00 for condos. Communities less than 50 generally will pay more per door than communities over 50, just the cost of doing business.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Roger

$20 per lot per month is very high. Maybe what you are facing is they
have a minimum fee.

RoseM9 (Texas)
Posts: 22

Posted:

Thank you everyone; this is excellent feedback for us to consider.

Breaking it down by month makes it very easy to accept. Accounting and admin are a great thought as long as they are willing to try and manage the deed restrictions on their own. We would even be willing to accept occasional pictures from board members and load the violations into our software and issue letters. We do this with one of our small communities and it works well for them (and us) and keeps their costs down since it's infrequent that they have deed restriction issues.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By MaxB4 on 12/02/2021 11:36 AM
First, a management company should have a minimum price for which you charge for services. A supposed industry standard is $10.00 per door for detached communities and $15.00 for condos. Communities less than 50 generally will pay more per door than communities over 50, just the cost of doing business.

I had a 7 unit complex at $50.00 a door. Our minimum price was $350.00 a month.

RoseM9 (Texas)
Posts: 22

Posted:

RogerJ1,

I was trying to find a way to PM, and messaged help a few days ago, but haven't heard anything back.. I know I used to have the feature but I'm not sure what happened.

I don't want to violate rules on soliciting business on the forum, so I'm hesitant to answer, but we do manage in your area, and are located in Houston, near Katy =)

We grew quickly, so we are taking a few months to get automation and systems in place before taking on more clients, but in the meantime, I'd be happy to give recommendations on the local companies you are looking at.