HOAs-Self-manage or go pro?

By - Hector AlvarezMost homeowners associations (HOAs) ask themselves at one point or another whether to self-manage or hire a professional management firm to manage their community. A lot of things go into consideration when making the final decision and what’s best for your HOA. Of course the top one on the list is the cost, as this could become a hardship for the HOA, especially for smaller HOAs and during tough economic times.Benefits of going pro:

• Varied Expertise–An HOA management company will have diverse professionals on staff, including experts trained in property management, finance, accounting, human resources, marketing and more.
• Legal Knowledge–An HOA management company is often very knowledgeable regarding legislation affecting homeowner associations.
• Communication–It’s important that everyone within the community feel comfortable voicing their concerns and ideas. A professional management company can bring more to the table than just enforcing HOA rules.
• Vendor Management–Management companies are experienced in building solid vendor relationships. They know how to keep issues from escalating. Also, vendors may be more inclined to work with professionally managed HOAs because they know the chances are high the community will be well run.
• Consistency–A good HOA management company enforces rules and policies with consistency. The management company makes sure there’s no perception of unfair treatment or favoritism among members. They also deal with any problems as soon as they surface.

Self-managing your HOA could become a full time job. Trying to manage the day-to-day aspects of the HOA can become stressful and time-consuming for volunteers. On the other hand you will have a better understanding of the HOA’s operations, finances and will save the community the cost of hiring a professional management company. In order to be an effective and well-structured self-managed HOA it is important to have the following:

• A Board that’s skillful in finance, taxes, construction, the law, communications and project management.
• The Board is willing and able to take on the responsibilities and commitment.
• Firm understanding of your HOAs bylaws and regulations.
• Strong book keeping records of the HOA finances.

Of course, you can also do a mixture of both by knowing what your homeowners are willing to tackle and hiring outside professional help to do the rest. Some HOAs outsource their accounting where an accounting firm handles all of their finances, for example, billing and deposits, while board members handle the complaints and inquiries from homeowners. Either way the Board should always be involved and maintain its oversight responsibilities.