Property Management – West Hills
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What to Look for in Hiring a Property Manager
Would you shop in a clothing store with a sign that said “one size fits all”? Sometimes associations hire property managers and the agreement resembles a 150 pound man wearing a suit made for a 300 pounder.
It is a fact of life that most associations, regardless of size, need some degree of professional management services. Whether it is bookkeeping, collections, payables, bid review, inspections, etc. These services can be obtained from experienced and qualified professionals.
However, what happens too often is a board will be presented with a standard form contract by their chosen manager, without understanding what they are really signing.
1. Who is going to manage the property? This does not mean which person, but rather, it is a question about the board’s intent. All too often, a board of directors will hire a manager, sign a standard full-service contract, pay top-dollar for quality service and then micro-manage the property themselves. This does nothing but create confusion.
A board of directors is typically composed of a diverse group of personalities with different backgrounds. Sometimes a board will have members who feel comfortable overseeing all of the daily activities, regardless of how competent their manager. This is an unnecessary duplication of effort. If the Board is going to take a hands-on, caretaker approach, then they need to have a customized contract for specified services.
On the other hand, sometimes a Board is composed of busy people who have neither the time nor inclination to monitor the property on a daily basis. This is when a full-service agreement is appropriate, but then the Board must let the manager manage!
2. Check references. It is not enough to get a list of names that the manager represents. A conscientious board should get references for similar types of properties. The inquiry is not whether they do a good job, since only positive references will be provided. Rather, the inquiry should deal with how specific situations get handled and whether the manager’s approach to a similar property is compatible with yours.
3. You Get What You Pay For…! Boards that consistently hire the lowest bidder will never reach their full potential appreciation in value. This is particularly true in hiring a property management company. If a company is bidding a fee proposal that is lower than industry standard, that also means that their employees are being paid below standard. Are highly qualified professionals going to work for a company with a substandard wage structure? When a board hires a property manager, they are not just hiring bookkeeping and customer service businesses, they are also paying for consulting, advice and expertise. As a board member, I would always want to hire the best person, not the cheapest. There will be far greater savings in the big picture.
Also, what really is the fee you are being charged? Some companies offer low rates but have all types of hidden charges and per diem rates that dramatically raise the actual fee.
4. It’s not always someone’s fault…! Some properties were not constructed using the best techniques or the highest quality materials. These buildings are going to deteriorate at an accelerated rate and require significant rehabilitation. Many communities unfortunately are hard-pressed to pay their bills and still take on multi-million dollar construction projects. While not getting into a discussion here about properly funding reserve accounts, it is not uncommon for some individuals to place blame, rather than attacking the problem itself. If a property is under reserved or undercapitalized, it may not be the manager’s fault, or the accountant, or the lawyer… Unfortunately, all too many relationships are unnecessarily terminated because new board members need someone to blame because of an association’s financial ills.
5. Who is really managing the property…? By all means, visit the manager’s offices. Take a tour. Walk a delinquency or a service request through the different steps. Review samples of financial reports. If the management company cannot impress you this way, they will never be able to do it with your property.
In conclusion, in evaluating the needs of a board for a good match, the things that should be considered are trouble-shooting abilities, responsiveness, follow up, proactive advice, efficiency, etc. Pricing, attractive brochures, dazzling sales presentations, etc. are often impressive, however, it is the level of hands-on, personalized service, problem-solving capabilities and the ability to enhance the appearance and value of the property that are really the most important considerations.
by Jordan I. Shifrin
Carnahan Property Management services Woodland Hills,West Hills, Calabasas, Canoga Park, Tarzana, Reseda,Porter Ranch, Topanga, Encino, Northridge, Van Nuys,North Hills,Chatsworth, Sherman Oaks, Studio City, North Hollywood, West Hollywood, San Fernando Valley, Granada Hills, Mission Hills, Simi Valley, West Lake Village, Agoura,Toluca Lake, Valley Village, Burbank. Call us at (818) 884-1500 and check if we can serve your area.
