By Salvatore J Sciacca aka CondoBoss
I get it. Board of directors are looking for ways to cut costs especially in times like today where there are higher delinquency rates due to non paying homeowners. And even historically, associations and board of directors have thought that saving on property management services for their community association is a great way to tame the budget.
Besides, the line item for condo management is usually one of the biggest costs and sometimes might be the biggest operational expense line item. The reality is that there are many other line items at stake when associations hire the cheapest property management provider.
So what are the risks when hiring a CHEAP management company. And when I use the word cheap, I mean it in the way that the attached graphic indicates. You REALLY can’t have CHEAP, GOOD, and FAST all at the same time. Studies have shown that you will sacrifice QUALITY and SPEED if you want CHEAP.
If you sit on the board of directors, the million dollar question that you need to ask yourself is simple: “How can a property management company afford to charge so little and provide the
exceptional service that the salesperson promised the board during the presentation”. The answer is even simpler:
So let me give you some real world examples of what associations and board of directors sacrifice when going for CHEAP condo management:
- Overpay for contract services You can pretty much guarantee that the property management won’t pay attention to these line items.
- More Homeowner headaches The homeowners will be told to deal with issues on their own or to work it out with the other neighbors.
- No return phone calls The property manager may not even return your phone call.
- SLOWWWWW to return phone calls If the property manager does call you back, it might be a while so sit tight!
- Poor advice or wrong advice The property manager won’t give you helpful advice and sometimes will give you the wrong advice.
- Longer board meetings The board meetings will last much longer than 1 hour and you should not expect any guidance or advice from your property manager. You can bet your bottom dollar.
- Large number of complaints Rest assured that there will be a large number of complaints from both homeowners and board members of how there is a lack of response from the property manager.
- Bills paid incorrectly With a cheap management company, you can rest assured knowing that bills will get paid that should not get paid.
- Overpay for projects You won’t even realize it but you will pay about 25-50% more for projects which is the BIGGEST cost to maintain an association.
- HIGH STRESS. FRUSTRATION. HEADACHES. Bottom line. You will need lots of Advil to deal with all the headaches you will experience.
So are you really saving by hiring a CHEAP condo management company? Hmmmmm.