Moving from self-managed to professional management: Unforeseen benefits from making the change

A lot of condominium and HOA boards like to manage their own associations without the assistance of a professional management partner. It’s understandable! At first blush, being self-managed seems to have a lot of benefits: 

• Money spent on management fees can keep assessments lower or allow funds to be redirected to other priorities. 

• The board might feel they have more control over the daily tasks of operating the property, including hiring and firing staff. 

• Some boards think self-management can lead to greater resident involvement in meetings and voting if they feel like they’re a bigger part of planning and decision making. 

However, those benefits can come with downsides: 

• Keeping assessments low doesn’t necessarily benefit the community if critical maintenance is delayed, deferred or skipped entirely to save money. 

• Control usually means constant work for board members, especially when big projects are taken on. 

• Full responsibility for hiring and managing employees can cause liability issues for board members. 

• Boards from self-managed communities typically purchase products and services at retail prices. 

In a climate of more complex legislation and financial challenges such as higher insurance costs, a tougher labor market, inflation and increased operating costs across the board, it’s critical that any board have access to the right information and assistance to manage their condo or HOA to improve the lifestyles and property values of everyone involved. Making a move to professional management can uncover unexpected financial and other benefits.  

The Residences at Sandpearl Resort 

The Residences at Sandpearl Resort is a 16-story luxury high-rise featuring 117 units and breathtaking ocean views in Clearwater Beach, Florida. It boasts a fitness center, swimming pool, social gathering areas, and a tropically landscaped deck. The building was self-managed for 12 years. Then they shifted gears and chose FirstService Residential as their partner for professional management,

Jake Howse, from FirstService Residential, recalls how he connected to the board at Sandpearl: “They were doing a good job at self-managing and things were running fairly well, but their bookkeeping company was underperforming and there were some opportunities the board wasn’t taking advantage of. As we learned about one another, the board realized that we could offer much more than property management, like a bulk cable and internet program, elevator agreement, banking services and more.”

Howse and his team offered Residences at Sandpearl proactive management services, staffing solutions, financial reviews and reports, an invoicing system, access to banking and insurance resources, vendor management, technology implementation and more. And the team at FirstService developed a comprehensive plan to make the transition to professional management as easy as possible for the board and the residents. Howse and his team realized opportunities to help the board at Sandpearl move to the next level in ways no one had foreseen. As those opportunities and challenges were uncovered, the board bought into changes and improvements they hadn’t considered before. 

What happened next on their move from being self-managed to a professional management company? 

Karen Lillie was the first community association manager FirstService Residential put in place at Sandpearl. Today, she’s a regional director for the company. She said that, of the many accomplishments during Sandpearl’s first few years with FirstService Residential, she’s most proud of creating a foundation for the community to build on. “No matter which FirstService property manager is assigned to the property, they now have a solid emergency management and hurricane plan, concierge manual, preventive maintenance plan and staff training manuals,” she says. These are living documents that will work for anyone running the property.” 

In addition to that foundation of SOPs and best practices based on the management of thousands of communities, Lillie and her team made other significant changes at the property in short order: 

• FirstService Financial, the financial arm of FirstService Residential, conducted a banking analysis for Sandpearl that resulted in $25,000 in increased revenue generated by more favorable interest rates for bank deposits. This isn’t a one-time increase either; it contributes to the association budget every year.

• FirstService inspected the community’s budget, line by line, and identified more than $10,000 in cost savings while maintaining – or even improving – service levels.

• Management and the board prioritized a plan to fully fund reserves to prepare for future repairs and replacement of expensive equipment and systems. FirstService Residential has long recommended that associations fully fund reserves, putting associations that did so ahead of the curve when it became the law. 

• The board and management partnered on a pool deck refresh, enhancing the community’s focal point with lush landscaping and umbrellas.

• FirstService management teams coordinated a major renovation for The Residences at Sandpearl, with a budget of nearly $600,000, which included:

  • New entrance

  • Complete remodeling of all interior spaces, including the lobby, mailroom, social room, dining room, billiards room and conference room, catering kitchen, coffee bar, management office, and hallways

  • New porcelain wall, piano, artwork, TV sets, and fireplaces for the lobby and common areas

  • New furniture including chairs, ottomans, benches, console table, bar stools, and dining table for the lobby and common areas

  • Updated countertops, flooring, and carpeting

• Management created a Clearwater Visitors Guide, featuring area restaurants, shopping and attractions to deliver an entertaining and fulfilling experience to Sandpearl’s part-time residents and guests.

Michaella Gregg is the current property manager at Sandpearl. Gregg says that the board is happy that things are being done more consistently and professionally in the association and that “having the right company behind the manager makes such a difference!” 

She’s already making a significant contribution to the property. They’ve installed a privacy and security fence along the property’s boardwalk by the beach. Plans include big changes to the pool deck, reducing the landscaping to allow for easier maintenance of structural elements, and painting the whole building. They also replaced the aging metal water softener system with one that’s fiberglass and won’t corrode. Importantly, they also attained their Florida-required Structural Integrity Reserve Study this year, well ahead of the deadline. 

Transitioning from self-managed to having a professional partner has its challenges. But they come with benefits boards may not realize. 

“It can be a tough shift for a board to go from handling all the tactical, daily needs of an association to being able to focus on strategy and vision for the community,” Lillie explains. “But once the board made that change, they loved it! They meet once a year to lay out their plan for the coming months. And they can do that because they know all the day-to-day operations are handled. Eventually there’s almost a sigh of relief that they have an army of resources, not just a manager.” 

Switching from self-management to partnering with a professional company has risks and rewards. Download our guide today to learn more!