Looking in from the outside, community association management looks easy – anyone can do it, right? Let's take a step through the looking glass to see what it's really like...
Meet Joe*, formerly President of the Board of his community association, Live Oak Towers, a 650 unit condo association. Joe has become frustrated and disillusioned with his community’s management company and has decided he can do a better job – and charge a lot less for it to boot.
Having recently retired from business, Joe has a lot of experience in management. He has also successfully run his own small business in the past, on top of his more recent experience serving on the Board for his HOA the past 2 years. With all of this knowledge under his belt, surely Joe can handle a few hundred homeowners! So Joe takes up the mantle of community manager.
Unfortunately for Joe, the difference between an experienced community manager and someone who is only beginning in community association management becomes obvious to the community pretty quickly. Joe has a lot to learn – not only about the specifics of his new job, but of the industry as well. To Joe, it kind of feels like falling into the rabbit hole to Wonderland – the hole just keeps getting deeper and deeper.
Joe tries to save the community money by choosing an off-the-shelf accounting software that he used in the past to run his small business. After all, accounting is accounting, right? Violation letters can be created in his word processor, and budgets and other various data can be managed in spreadsheets.
Joe vows to replace all of the community’s vendors, but soon becomes mired in the morass of bids and contracts and hidden costs, not to mention having to stave off other board members who want the community to hire their cousin’s lawn service.
Meanwhile, Joe is dealing with a shrinking budget and the community’s books are a mess. If his days are spent dealing with vendors, his nights are dominated with running the books. All of the work-arounds he is setting up in his generic accounting software to ‘make it work’ are getting more and more complex. It’s like trying to fit a square peg into a round hole.
Those documents containing violation letters to his homeowners are adding up and it's getting harder and harder to keep up with what violation stage each homeowner is on. And forget about applying fines and architectural fees – it’s just too hard to keep up with.
To make matters worse, a law was just passed by the state says that Joe now needs to separate dues from fees and special assessments in each individual owner’s statement, which means Joe needs to go back and separate out every recurring charge in his accounting software.
At this point, Joe is so deep in the rabbit hole he fears he may never see the light of day again...
Like Alice in Wonderland we can think of this story as a cautionary tale. Had Joe stuck with an experienced community manager for his association, he could have avoided all of this pain and suffering and had a successful, well-run community full of (mostly) happy owners (After all, this isn't a fairy tale, and you can’t make all of the people happy all of the time!)
But let’s say for a moment that you are Joe. Or someone in a similar situation, new to community management and wanting to avoid the pitfalls that Joe encountered. What choices would an experienced community manager have made that would have changed the outcome of this scenario?
The answer is simple: industry-specific software. One of the most common mistakes that many new community managers make is cost-cutting in the wrong places. Choosing to use off-the-shelf software seems like a no-brainer at first because it is cheaper and many people already know how to use it. What happens in reality though is a different story.
But don't take my word for it. Thousands of communities have successfully made the switch to self management, and they are happy to talk about the secret to their success:
"You should not have to put up with general purpose, broad based database software. You end up with all these ‘makearounds’ and little fixes and situations where you can’t quite accomplish a task properly. Buying and installing industry-specific software is the key to success."
– Jon Oesting, CPA for Sudden Valley Community Association
"I would attend industry workshops and seminars and I would always ask what accounting software people were using... We were dinosaurs in terms of the accounting software we had been using, it was a software package that was not specifically designed for property management."
- Lance Stitcher, CMCA, AMS for Captain's Cove Golf & Yacht Club
Going self-managed is not an impossible task. With a little bit of homework and a lot of dedication, your community can take control. Just make sure you choose the right tools to ensure that the job is well (and more easily) done.