Managing Co-ops and Condos
What should property managers do well? How should fees be earned?
Property managers must preserve and grow a property’s value.
They must keep a building’s financials buttoned-up.
This includes invoicing and collecting maintenance, tracking arrears, managing the balance sheet and cash flows, drafting and tailoring an annual budget, protecting funds, and ongoing delivery of financial data to the building’s CPA.
They also must manage the property very effectively from top to bottom.
This includes building staff, interfacing with unions, communicating board priorities, providing onsite services, monitoring renovations and project teams, ensuring licensure and sign-offs for teams, coordinating mechanical inspections, enforcing code, supervising capital improvements and repairs, managing vendor bidding, attending meetings, providing monthly statements, managing transfers and board packages and procuring insurance.
Property managers are clearly essential. Yet often, they seen as dispensable or interchangeable.
They’re commonly paid flat fees based on maintenance receipts. They operate on thin profit margins. There are no incentives to hire top talent and serve owners well.
Better service can come through incentive-based compensation. Solutions include fees as % of operating income, longevity and owner contentment bonuses, and more.
When encountering these methods during due diligence for our purchaser clients, we have seen these methods used to good effect.