Striving to be the Best How Management Companies Stay Competative

Striving to be the Best

 According to the Florida Department of Business & Professional Regulation, the rate at which real estate professionals in Florida  are seeking licenses has fallen 75 percent in the past five years. Many  professionals believe the decrease of license seekers is due to the state’s residential market meltdown, but the fact remains: condominium and cooperative  management companies are a dime a dozen in the Sunshine State.  

 Despite the slow growth in Florida’s real estate market, existing condos and co-ops need smart management more than  ever. Management companies continue to vie for business across South Florida,  and sorting through all the options can be tricky. But, a proper assessment of  your association’s needs, can make all the difference in helping you make an informed decision.  

 Hiring a Manager or Self-Managed

 According to the Community Associations Institute (CAI), a nationwide  organization providing information, education, and resources to community  associations, there are about 60,000 community association managers nationwide,  and there are 10,000 community association management companies. Between 15 and  25 percent of common interest communities—co-ops and condos, respectively—are self-managed and don’t employ an on-site manager or management company.  

 Therefore, it takes a lot for a management company to stand out in the crowd.  

 Some attempt to do so by marketing themselves as “boutique” firms, specializing in a certain type of building or level of service. Others  go broader, offering everything from day-to-day administration to maintenance  services and capital project management. Still, others focus on bigger building  complexes, which inevitably need more services than smaller communities.  

 There are plenty of differences from one management to the next, so before  randomly choosing one, there’s a lot you need to know so that you can find the perfect fit.  

 Is Licensing Required?

 Start by finding out if they’re licensed or have some professional accreditation.  

 The Florida Department of Business & Professional Regulations requires that a management company must have a real  estate broker’s license. Key components of property management (renting and leasing) are  considered a real estate activity under existing Florida real estate licensing  laws. A property manager needs a broker license if he or she is paid a  commission, and is handling rentals and leases for others. No license is  required for managing personally-owned properties.  

 So if you have a building where renting is allowed, then you’ll want a management company that has its license. Once they have this, they can  also list and negotiate the rental needs of the property. Trade organizations  like CAI and the Institute of Real Estate Management (IREM), provide  educational instruction and accreditations related to the management field.  

 Florida also requires a Community Association Manager license if someone  receives compensation for providing management services to an association with  ten or more units, or one with a budget of $100,000 or greater. For additional  information go to www.myfloridalicense.com.  

 Beyond dealing with rentals, every management company is expected to provide  basic services, says Jay Mangel, president of Exclusive Property Management in  Fort Lauderdale. “Not everybody does the same thing but usually there are four basic items,” says Mangel. “There’s physical property management—that’s being on-site and physically being at the property. Vendor property management  is dealing with individual vendors working about the physical property and  their contracts and obligations; administrative property management—the subtitle to that is sales and leasing and dealing with the individual  homeowners and members of the community about their issues. And then there is  financial property management, which is accounts payable, receiving and  producing the actual financials, bank accounts, that type of thing.”  

 While the basics typically remain the same throughout the years—collect the income, pay the bills, watch the staff and keep excellent records—new technology has made these transactions much faster than in previous years.  

 Instead of collecting maintenance and common charges via check and the postal  service, most management companies pay and get paid electronically by  transferring the money through PayPal or a credit card. Many now even handle  the application and transfer process for sales and leases electronically.  

 This means that every large management company should have someone who is up to  date with computer technology so they are able to do everything electronically,  which saves on postage stamps and time.  

 “My entire staff and I have actually converted over to iPhones and iPads so we  can work in the field and be virtual,” says Mangel. “And most of the property management software has new apps for the new iPhones.”  

 “We’ve always been ahead of the curve when it comes to technology,” adds Jonathan Louis, LCAM, CMCA, AMS, and the CEO of American Management Group  located in Pembroke Pines. “We offer all types of interactive tools. People can book their amenities online  and they can track service orders online. Our company is now on the cloud  platform. We have all the redundancies built in so we are never down. So if one  server goes down it flips to the other, and so on.  

 “What it really is—is efficiencies. A manager can now take a 30-minute function and do it in 30  seconds. That’s how much time you save and that’s how much service you are able to bring to the table. In the old days, you’d have to drive a stack of checks over to one board member and put it under his  doormat. He’d review it, sign it then put it under another board member’s doormat and so on and so on. The whole process could take weeks depending on  how accessible the board members were. Now everything is online. If we have  invoices that need to be approved now, we scan them to a secure website and  send an email to the board members who are involved in the approval process,  saying you have invoices in your queue. Now that process will take a couple of  hours, max.”  

 Supervision and Training

 According to experts, staff supervision has also changed. Increased racial and  sexual harassment training is now standard, and documentation is absolutely  essential to avoid being caught up in unnecessary litigation. Regulatory  requirements and energy deregulation have also driven an expansion of services.  

 Some management companies hire architects, engineers and green energy  specialists as consultants to help them through the maze of tariffs,  exclusions, degree days and peak loads, while other firms have added in-house  services such as mechanical engineers, certified public accountants and  attorneys so they don’t have to continually hire outside help in order to stay competitive.  

 As a result of the competition and the growing needs of modern buildings,  community association managers need to be capable of a larger range of duties  than in the past.  

 “Because of the economy there are a wide range of people in Florida today who  have gone into the property management business,” says Louis. “You’ll find construction workers and people who were in the hospitality industry.  You’ve got a wide range of people going into property management, and for the most  part these people have degrees or a lot of business experience.”  

 “In our company, we prefer someone to have an associate’s or bachelor’s degree but it’s not absolutely necessary,” adds Erik Levin, LCAM, the chief operating officer of American Management  Group. “But you are required to have several years of experience. You are required to be  licensed, so the license itself shows that you have the technical skills to be  able to handle and understand Florida law, but it doesn’t tell anyone that you have management skills.”  

 Managers also need to have the unique ability to deal with board members, who,  in South Florida, may be some of the most successful people in the world. They  also have to work with unionized staff, lawyers, accountants, engineers,  tradespeople and contractors. And of course, they are managing your home, and  possibly your largest single investment.  

 “To stay current we have monthly manager meetings where we give updates on any  statutes or laws that may have changed, not only the legislative but the  practical,” says Levin. “We also have experts in different fields like law or accounting to discuss new  things in their field with our managers that will keep them up to date.”  

 In recent years, the buildings have added more amenities to attract buyers and  renters. Pools, large fitness facilities, movie rooms, online chat and message  boards set up specifically for the building, fully furnished green roofs,  outdoor movie theaters and running tracks are just a few of the amenities  offered in high-end co-ops and condos in South Florida.  

 With each of those amenities, the role of the management team changes. By adding  an online presence for the building, they may need to hire a full-time social  media person who can update Facebook and Twitter feeds, as well as to monitor  the message boards and continually maintain the website.  

 Adding a pool or any outdoor amenity means additional insurance and landscaping  jobs for the management team.  

 That’s why board members need to do their due diligence. Before selecting a  management agency, make sure to visit other buildings it manages to see if  yours is similar. If the management company specializes in large high-rises and  you have a 10-unit building, then it may not be worth it to pay the higher fees  for this agency.  

 Do you want a management company that only does management--or would you prefer  to have a larger company that manages buildings, but also does real estate  development and other real estate transactions? Some boards decide to have the  larger company so that they have more people to help for every situation. Or,  they may want the real estate brokers so they can possibly cut a deal whenever  a new unit is for sale.  

 But others prefer to just have a management company solely focus on management  so they know there will be limited conflicts of interest and more focus on  simply running the association’s buildings.  

 Regardless of your choice of comprehensive or combined management companies, you’ll still need to do more research before your make your final decision.  

 Make sure to interview the board members in the management agency’s current properties to see if they’ve had any issues. Sometimes, the management firm may appear qualified, but if  they rack up late fees or are slow to move on vacancies or broken equipment, it’s a good bet that it probably won’t work out.  

 Finally, ask for the management firm to give you a detailed breakdown of their  costs and fee analysis. If there is an energy saving incentive available that  the management company arranges for the community, for example, are they going  to take a cut of the savings? Will you have to pay extra any time they fill a  vacancy or is it a set fee annually?  

 Professional residential management is a service industry, and it’s no secret that some service providers perform better than others. To evaluate  how your property's management measures up, it's necessary to assess both how  the company functions as a whole and also how your individual manager is  performing.  

 “Word of mouth is the best marketing tool a property management company can have,” says Mangel. “If Mr. Jones says to Mr. Smith you should really use this property management  company, ‘we use them and they are on the ball,’ that’s the best marketing you can hope for.”   

 Danielle Braff is a freelance writer and a frequent contributor to The South  Florida Cooperator. Staff Writer Christy Smith-Sloman contributed to this  article.  

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