Financial Risks of Choosing an Unproven Management Firm

Consider the financial risks of hiring unproven association management firm

With the recent changes in the U.S. housing market and the rise of online real estate platforms, many less experienced real estate agents and brokers have shifted their business from real estate sales to condominium and homeowners association management. While some smaller, unproven management firms may have a great sales pitch, there are potential risks associated with smaller, less experienced, and less financially secure management firms that could have a major impact on your community association, such as:

Impartial Manager Fiduciary: A small management company will have fewer HOA managers, and they may be overly reliant on one or two managers, who may also be principal owner(s) of the management firm. It is important for the community manager and firm to have an independent relationship for the continuity, transparency, and efficiency of the HOA operations. It can also take time and resources for less experienced managers to learn the specifics of the HOA and establish a reputation and rapport with the board and the homeowners. Does the smaller firm have the experience, financial backing, employee recruiting opportunities, and insurance coverage to survive and guide your association through any financial or disaster situation? If the smaller firm had a financial setback, would your association be impacted? It is important to understand the financial risk you are taking as a board member of your association.

Lack of Communication: An unproven management company may not have enough staff or advanced systems to respond to the HOA’s queries or concerns in a timely manner. This can lead to frustration, misunderstanding, legal issues, and mistrust between the HOA and the management company.

Low-Quality Vendor Services: A less experienced management company will not have a rigorous vendor selection process or a wide network of reliable and reputable insured and licensed vendors. This can result in low-quality or overpriced services for the HOA and a lack of independent financial oversight of the relationship between the management company and the vendor. The ethical issues can also carry over to the Board of Directors and affect the long-term maintenance and financial strength of the community and insurance coverage. All three items can have a detrimental impact on the resale value of homes within the association.

Inadequate Accounting and Reporting: A small management company may not have the expertise or the technology to handle the HOA’s accounting, reporting, and Human Resource needs. This can result in errors, discrepancies, or delays in the HOA’s financial statements, which can affect the transparency and accuracy of the HOA’s financial health.

Risk of Income Loss: A smaller management company may not have the skills or the tools to manage the HOA’s cash flow, collections, and reserve funds. This can result in a decrease in revenues or an increase in expenses, which can affect the HOA’s ability to fund its operations and capital projects.

Risk of Fraud, Theft, or Embezzlement: Last but certainly not least, a smaller, less experienced management company will likely not have the proper safeguards or controls to prevent or detect fraud, theft, or embezzlement of the HOA’s funds, including from online cyber security threats. This can result in a significant loss of money or assets, which can damage the HOA’s reputation and financial stability. We have helped many associations over our history that have had funds stolen from smaller management companies leaving the community in financial shambles. CMA has the experience and resources to help any association recover, but it can take years to fill the hole which will impact the resale values and insurability of the association.

These are just a few of the possible financial risks of an HOA going with an unproven management company. However, not all management companies are the same, and some may provide excellent service and meet the needs of your community. It is important for the board to do its due diligence and research before hiring any management company, regardless of its size. The board should also monitor and evaluate the performance of the management company and its insurance coverage and licensing regularly, and communicate any issues or concerns as soon as possible to reduce the financial impact on the association.

CMA has the expertise and resources to help guide your association through any crisis or loss. As the largest community association property management company in Atlanta, Alpharetta, Augusta, Dunwoody, Peachtree City, Roswell, Birmingham, Fairhope, Nashville, Destin, Santa Rosa Beach, and Naples, we are here to help your community thrive.

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What Makes CMA Different?

What makes CMA different?

If your community is considering a new community association management company, as the leader in association management throughout the southeast, Community Management Associates may be the solution your association has been searching for. Our core values of loyalty, integrity, trust, mutual respect, and professionalism have helped us become trusted leaders in the industry. Client satisfaction is our primary objective, and we are willing to go the extra mile for all our valued customers. We actively participate in the communities we serve to make a difference from within. Choose CMA and get the level of service your community deserves.

Unmatched expertise!

CMA belongs to several chapters of the Chamber of Commerce, the Community Associations Institute in Georgia, Florida, Tennessee, and Alabama, and many other licensing organizations in the southeast. Our community association managers meet or exceed the state licensing and certifications requirements in every state we serve. They have the professional skill set to help communities thrive. The PCAM designation is awarded to the top managers that specialize in community association management. CMA is proud to hold the highest number of PCAMs of any association management company in the region. Our experienced managers have advanced skills to tackle any situation that comes their way. We make it a point to assign communities to managers based on geographical proximity so the community receives the best possible service and our managers spend less time in traffic!

How do we ensure excellence?

CMA hires talented state licensed community association manager professionals who are willing to innovate. We focus on the combined strengths of the team as a whole, allowing everyone to share their new ideas and initiate valuable collaborations. Not only will your community have access to your assigned association manager, but each community association manager is also supported by our client services team and a supervising manager to assist residents and board members as needed. CMA also offers after-hours emergency call service to handle emergency calls during non-business hours. CMA is always available for your community. We are always looking for inventive, highly motivated professionals interested in community association management to join our team. Find your career with CMA.

We offer a wide range of services!

One of our main strengths at CMA is that we offer customizable service solutions to meet the unique needs of each community. Whether your community needs full service with concierge staff, financial only or developer management through the turnover process, CMA can customize a solution for you. We know that every association has its distinctive characteristics, and we want to preserve those details and character. We strive to ensure that you are proud of your home and community by offering a wide range of services. Whether you need help for property management in Atlanta, August, Birmingham, Nashville, Destin, Santa Rosa, or Naples, we are always here for you. Our customer service is ready to answer your calls. Some of our popular services include:

We help Homeowners Associations operate smoothly so they can maximize their resources and keep the community financially secure.

Training for new board members.

Our team of talented managers will be able to gauge the needs of the community preemptively. CMA will handle all communication efficiently to ensure that your owner residents are heard.

Accurate and transparent association accounting of financial records is vital to community association management. Our in-house financial experts will provide you with 24/7 financial visibility so you know how your association funds are being handled. Newer or smaller management firms with less oversight and experience can’t provide your community with the same financial peace of mind as CMA.

We can help you with payroll, assessment collection, annual budgeting, special assessments, capital improvement loans, insurance reviews, annual contract reviews, and many other important association functions.

You can contact us here!

Boosting Neighbor Participation in HOA/Condo Meetings

Homeowner engagement is one of the main pillars of a strong community. Existing and new homeowners need to be involved in the community and participate in HOA meetings often. HOA meetings are an essential part of community association management, as they allow the board of directors and homeowners to communicate, make decisions, and resolve issues that affect the community for years to come. Participation in HOA meetings is important for both the board and the homeowners, as it ensures that the community’s needs and interests are represented and addressed timely.

Participation in HOA community meetings is encouraged and sometimes required by the governing documents. Board members and homeowners have the right and the responsibility to attend, speak, ask questions, and vote at the meetings, as appropriate. Participation should be respectful, constructive, and relevant to the agenda items. Virtual participation can help increase engagement due to everyone’s personal responsibilities. With virtual participation owners are give the option of attending and participating in HOA meetings remotely, using technology such as phone, video, or online platforms. Virtual participation may be allowed or required by the governing documents, the state law, or the board’s discretion, depending on the circumstances. Virtual participation should follow the same rules and etiquette as in-person participation, and should ensure that the meeting is accessible, secure, and transparent.

As more homeowners begin to participate in HOA meetings, you will be able to collect feedback and create a well-managed community. If you are looking to boost attendance at your HOA/condo meetings, you can use the following tips.

Welcome the new homeowners

Many homeowners like to be formally welcomed into the neighborhood. It helps them recognize the role of the HOA in the community. You can send a welcome package curated by the HOA, so the new homeowners feel welcomed. Make sure to include items that feel personal to your community. Setting up a Welcoming Committee is essential to program consistency.

Host social events

Neighbors need to meet each other and establish camaraderie to create a thriving community. HOA meetings will see higher attendance when the neighbors feel as if they are doing something together for the community. Organize a few social events throughout the year so that homeowners in the neighborhood get a chance to get acquainted.

Widen the scope for participation

The prospect of simply attending meetings might not be appealing to many. You will benefit from providing them with an incentive to attend the meeting. Consider the broader interests of the community and how the residents can actively participate in decision-making. Creating volunteer committees will provide homeowners an avenue to engage with the community further. Committees allow everyone to share the responsibilities and have regular interaction.

Depending on the activities and interests of the board, you can start a Neighborhood Welcome Committee, a Landscape and Beautification Committee, a Homeowner Education Committee, a Finance & Budget Committee among others. This will help to foster a sense of community and responsibility which will increase participation in HOA meetings since everyone will want to stay updated in regards to their committee.

Regular communication

The HOA has to maintain regular communication with each of the homeowners to keep them engaged. Social media and emails have made it so much easier to broadcast information and keep everyone in the loop. You can issue a notice about the next HOA meeting and include the time and date so that more people are aware of it. Keep improving your communication methods. Working with a community manager at the leading professional community association management company in the southeast can alleviate the administrative burden on board and committee members. Make use of the advanced technology and web portal solutions that Community Management Associates has to offer every client.

Be punctual and respect everyone’s time

A board meeting should begin and end at the specified time. Homeowners like to know how much time they will be spending at the board meeting so they can arrange their schedule accordingly. Shorter and crisper board meetings will see higher attendance. If you develop a reputation for disrespecting everyone’s time, then homeowners will be less likely to get involved in the proceedings.

Reward engagement

Once the attendance of your HOA meeting goes up, you have to maintain the efforts. Show appreciation for the attendees so they continue to show up.

Boosting neighbor participation in HOA meetings will lead to new ideas and transparent community improvements. CMA can offer our decades of experience and resources to help encourage participation for a stronger HOA or condominium community.

In summary, community association management participation in HOA meetings is a vital aspect of maintaining a healthy, harmonious, and successful community. By following the rules and guidelines for HOA meetings, board members and homeowners can ensure that the meetings are productive, transparent, efficient, fair, and that the community’s best interests are served. For more information on improving community association management participation in HOA and condominium meetings, please contact Community Management Associates. CMA offers decades of experience as the premier association management company in Atlanta, Alpharetta, Dunwoody, Norcross, Peachtree City, Augusta, Birmingham, Fairhope, Nashville, Destin, Naples, and Santa Rosa Beach.

See how Community Management Associates can help your community increase owner participation for your community association. Request your customized community association quote today.

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Resident Retention Ideas For Property Managers Seeking Improvement

Resident retention is a common goal for many landlords and property managers in general. Essentially, it refers to ensuring that your renters remain with you for the long-term.

It’s also a great goal that can improve your rentals’ returns significantly. It’s also a challenge for several people, but you can do a few things to help your property management in Florida.

Why you should care about resident retention

Forbes argues that resident retention is critical, especially with the current health crisis. With vacancies peaking, keeping occupancy healthy is a priority for both landlords and renters.

Resident retention ensures a constant income. However, that’s far from the only advantage. From staying away from marketing costs and vacancy, it’s easy to see why retention matters for property management in Florida and everywhere else.

Retaining long-time residents

RealPage’s blog states that long-time residents are often perceived as less important than new residents. As we already mentioned, that’s a costly mindset, and renewals are a lot more beneficial than replacing renters.

That’s why learning how to keep existing residents can be a lifesaver.

Relationships are vital

With that in mind, the most effective way to boost resident retention is to nurture honest relationships. You want to incentivize your tenants to renew their contracts.

Common practices include reserved parking, renovations, and promoting community projects and events.

Keeping everyone happy

Zillow also has several recommendations to ensure positive retention. These are more general than our previous section. However, they also pinpoint the foundation of keeping occupancy: healthy relationships.

Communities

You can create a sense of community to strengthen the relationships of all residents with you and each other. You can use common areas to host events for holidays and celebrations.

With today’s health concerns, you don’t really need to forego this approach. You can use social media and similar platforms to interact with your residents.

Maintenance

CAM (common area maintenance) is vital for property management in Florida overall. That’s just as true (if not more) for resident retention.

Make sure to keep all common areas clean and in good shape. That includes responding quickly to repair and maintenance requests to make your residents’ lives easier.

Adapting to your renters

Finally, you want to make sure you tailor your spaces to your renters. You should consider adding amenities, like a sports court or a kid’s park. You can even run community polls to gather feedback.

Rental Property Investment Tips for Nashville

Why keep money in banks when you can invest the smart way? Investing in rental property can be a good economic decision that can help you save more. It’s easy to find experts recommending rental property investment with the benefits including financial leverage, easy property management, and demand.

Are you thinking of stepping on the pedal too to save more money?

Property management in Nashville continues to look promising. According to the Nashville Business Journal, Nashville is a great real estate market to consider right now due to its popularity peak.

That said, rental property is a significant first-time investment, even if you’ve done it in another city already. Therefore, we’ve compiled several tips to make property management for Nashville easier.

Assess your finances before trying anything

Even Investopedia’s tip list mentions this within its first entries. You need to make sure your financial stability can support this investment. First, ensure you pay off all debts.

Then, evaluate your responsibilities as a landlord. That doesn’t mean just focusing on the right mindset and nothing else. You need to understand the expenses required for property management in Nashville, like CAM (common area maintenance) and HOA fees.

Identify your target investment

After you’re sure you can do it, you must recognize what to invest in. That means picking a neighborhood and the type of property you want to buy. Thinking about the kind of tenants you’d prefer is also useful.

However, it’s not just picking between apartments and houses. You should assess the entire space: number of rooms, construction materials, parking, size, and more.

Research the market to find opportunities

The most important part of making any investment is to assess trends and chances. Forecasts related to property management in Nashville are vital to help you make your final choice.

Right now, Nashville is expected to increase in home prices for over 5%, totalling more than 9% after last year’s rise.

Calculate your cap rate

Your capitalization rate is your possible profits from your property’s next income. The Balance defines it as the return rate you can make from a cash-bought house.

To calculate it, you must compare your renting price, expenses, and its purchase price. After subtracting your expenses from its rent, divide the result by your purchase price. The result is your cap rate percentage.

A word of caution though – there’s no “right or wrong” cap rate. It’s up to you to decide what makes an attractive return.

The 1% rule

As a side note, the same article from The Balance also mentions the 1% rule. It basically says that, if your monthly rent makes up (sans expenses) is at least 1% of its price, it’s worth looking more into it.