In the past 50 years, the prevalence of condominiums and homeowners associations (HOAs) has grown exponentially. In 1970, there were just 10,000 HOAs in the U.S. In 2018, there were nearly 350,000, according to data from the Homeowners Protection Bureau (HOPB).
Many property managers eschew working with condominiums and HOAs because of their reputation for being complex and stress-inducing. However, Brad Randall, CPM, owner and operator of Welch Randall Real Estate and Property Management in Ogden, Utah, says the highs often make up for the lows.
“I have never been yelled at more than when working with HOAs,” says Randall, whose company manages 55 HOAs. “But there are some beautiful moments that come from working with HOAs. You can really develop some incredible relationships managing them.”
All about emotions
Instead of communicating with a single client or owner as one would in a traditional property management setting, a property manager for an HOA must answer to the board of directors. This governing board is composed of several different people, all with their own distinct personalities. Add in the fact that board members can change annually, and things often get complicated.
“In my mind—and in the minds of many colleagues I’ve spoken with who work in this industry—there is an intense focus on personality issues,” says Jay Kacirk, CPM, CCAM, executive vice president of Eugene Burger Management Corporation (EBMC), AMO, in Rohnert Park, California.
This challenge is compounded by the fact that communities often contain 100 to 200 units, if not more.
“If you start managing a 100-unit community, you, in a sense, have 100 bosses or people who feel they are potentially your boss,” says Kacirk, whose company manages 26,000 HOA units. “But in reality, it’s the board of directors we’re responsible to.”
In addition, condominium residents are often passionate about where they live. “There’s not as much of an emotional weight that comes from working with commercial properties,” says Randall, who’s also an instructor for IREM. “But when homeowners reach out because their home has been damaged, it becomes very personal, very quickly.”
The silver lining
Although managing condominiums and HOAs isn’t typically seen as a walk in the park, there can be myriad benefits to this sector of the industry. For one, property managers can develop strong, long-lasting relationships with both board members and vendors, Randall says.
Around 73.5 million people live in communities governed by HOAs, according to the HOPB. This is a major segment of the industry, and it can be very lucrative, Randall says.
“If you have other ancillary sources of revenue in your company—such as a maintenance division, a real estate brokerage, or a property management division for single-family homes—you can develop other revenue streams from HOAs that can be really profitable if they’re looked at properly,” he says.
Vickie Gaskill, CPM, ARM, MPM, owner and broker at Bell-Anderson & Associates, LLC, AMO, in Kent, Washington, agrees.
“I don’t think people realize that it’s a great profit center,” says Gaskill, who’s an instructor for the IREM Managing Condominium and Homeowners Associations (CID201) course. “Many people in property management avoid community associations, but I think there’s a lot to be said about what it can do for your company.”
Gaskill’s brokerage manages 57 HOAs comprising 5,400 units. She believes HOA management can—and should—be a meaningful part of one’s business.
“There’s a need out there,” she says. “Nothing is being built today that isn’t some form of a community association, be it a commercial association with medical office buildings or a multiuse building with retail on one floor and residential on another.”
Tackling new challenges
The COVID-19 pandemic ushered in a unique set of challenges for condominium and HOA property managers. For one, many condominiums with shared spaces like pools and fitness centers had to enact new cleaning and safety protocols.
Another noticeable shift came from residents being at home when they would have previously been at work.
“We saw a dramatic uptick in work orders, as well as complaints, once we got about two weeks into quarantine,” Randall says. “Residents wouldn’t have necessarily been bothered by a landscaper nicking the edge of their bush normally, but when they’re watching it happen, suddenly it’s the biggest deal.”
Another major challenge has been some residents’ ability to keep up with their monthly assessment payments, says Kacirk, who also teaches the Managing Condominium and Homeowners Associations (CID201) course. Nationwide, there’s been an increase in government restrictions regarding action against delinquencies, which has further complicated the issue.
On the horizon
In the past year, technology has changed the face of condominium and HOA property management. Annual and quarterly meetings, as well as board of director voting, often have been held virtually.
“I think that as we go into the next year, the need to provide more and more technological offerings for communities is going to continue to increase,” Randall says. “There’s going to be more need for virtual meetings and virtual votes.”
Gaskill believes this new emphasis on technology will change the face of condominium and HOA management in 2021. In many states—like Gaskill’s state of Washington—HOA meetings must be open, meaning the board of directors must allow community members to attend meetings (not necessarily to comment, but to watch). She believes an increase in virtual meetings will lead to more participation from residents.
Kacirk says people shouldn’t be intimidated by the unique learning curve that accompanies condominium and HOA management.
“Don’t write off this segment of the property management industry because of things you’ve heard,” he says. “It can be a profitable and fulfilling area of the business to work in.”To learn more about managing condominiums and homeowners associations, pick up a copy of IREM’s Community Associations: A Guide to Successful Management, Second Edition by Vickie Gaskill, CPM, ARM, MPM.