The selection of a professional property management firm may be the single most important decision a Board of Directors can make. Entrusting the Association’s financial, administrative, general and physical property management to a management company should not be taken lightly or with a short term perspective.
While Association annual budgets can range from the tens of thousands to the millions, if it is your Association, size is irrelevant. The Board generally wants the best management available. Remember, a management company is responsible for ALL the current day to day business of the Association as well as preparing the Association for the future. Selecting a management company should be approached in the same manner as one approaches a partnership. The decision should be based on a good “fit” between the management company and the Association. It should also be viewed as a long term commitment. Hiring a management company with the thought that they can be changed if they aren’t working out is not only short-sighted, it is a formula for failure.
A good fit is achieved when the Association runs smoothly over a long period of time…despite hurdles that pop-up. This requires that the property manager is on top of the Associations’ routine functions AND has made pro-active plans for the future. Most importantly, the property needs to be managed in a fashion that allows it to adapt to the ever changing environment we call “life”. This includes changes in the members of the Board, the residents of the Association, the economic climate, the ever changing legal and the political atmosphere, etc.
Through all the changes life throws at the Association the management company should act as the rudder of a boat…keeping the Association directed properly and steering to calm waters when the sea gets rough. A GOOD management company will assist the Association in weathering “the storm”. A GREAT management company will see the storm coming and navigate around it. They will also provide consistency and confidence when the climate changes. It is not an easy task and should only be entrusted to a firm with a proven track record over the long term.
Unlike a company that provides goods or commodities, (which should be purchased at the lowest price possible because, after all, a box of Cheerios is exactly the same no matter where it is purchased), a firm that provides a service can ONLY be as good as the talents’ of the people that staff the firm. That is why we hire only seasoned professional staff with a proven track record!
Client retention may be the single most insightful indicator of the long term quality of service provided by a management company. In an industry where the average retention term is less than three years and retention terms of over six years is less than 10%, GPM's average lifetime retention rate is 11.6 years! In fact, 30% of our clients have been with us for more than 16 years!
How long has the firm been in business? What is the tenure of their staff? How proficient is the staff? What type of reputation does the firm have? What do their current clients think? How often is the property manager switched either because the Association is unhappy or worse, the manager doesn't have the talent to succeed at the myriad of skills that are required. What type of account turnover do they have?
The bottom line question becomes, is the Board CONFIDENT that the assigned property manager is capable of running the business of their Association? Especially if the Board wishes to be a group of decision makers rather than a bunch of quasi property managers because that is the only way things get accomplished?