Businesses today wrestle remaining competitive in a tight market, and the property management field is no exception. 

“There are more companies now, and they are offering low prices which makes it very competitive,” says Marian Servidio, a property manager with Park Place Management Company, Inc., in South Burlington, Vermont.  She explains that new start-up management companies will often “low ball prices to get one or two associations that they can manage from home and then they grow from there.”  

Michael Phillips, chief operating officer of The Copley Group in Boston, Massachusetts, adds, “In recent years the market has been more increasingly driven by a change in how the market operates.  It’s become more difficult to get new business where you can charge a price which allows the company any way of making a profit.”  

Big vs. Small

Jason Rickman, CMCA, AMS, the chief executive officer of Rickman Management in Worcester, Massachusetts, says, “There’s a minimum amount a property management company has to charge in order to make a profit.  This minimum cost can be difficult for smaller associations to fit within their budget.  In many cases, smaller associations have to raise monthly fees well above market rates to bring on a professional management company.  This rise in fees can create unit owner animosity toward the management company for simply trying to provide a service at a reasonable price.”  

In fact, how to make a profit these days is a concern for many management companies. “There are costs to running a management company,” says Phillips. “The biggest costs are the people who work for you, but you also maintain an office which means rent and overhead costs, and if you want to manage a condominium building well from top to bottom, there are costs associated with that.  It’s hard for a company to manage condominiums without a decent fee.”  

“And people want their management companies to have a handle on everything from A to Z,” says Rickman.  “While boards don’t necessarily say that property managers should be doing more, it’s often clear that the unit owners think managers should be doing more and giving them more ‘bang for their buck,’ so to speak.”  Not only that, but Servidio adds, “They want quicker response times for everything.”  As such, she explains that “the only way to respond to that is to continue to automate our systems.” 

Keeping Current

Rickman agrees.  “The big question in property management these days is how to keep up with the pace, which means we need to understand how to combine technology with managing properties.  We see a lot more associations going to a web-based atmosphere where there is online access to everything with a log-in site where people can see exactly what is happening at all times.”  

“Homeowners,” says Servidio, “are more demanding,” and “we want to provide more information to boards without more office time.”  Fortunately, according to Phillips, technology has helped the management field to provide that information. “In the past, if unit owners wanted a copy of a master deed, we had to mail it to them.  Then the time came when we could scan and email copies. Now the owners can simply go to the website, which makes it more efficient for both them and us.”

Technology does have its downsides, though.  Phillips notes that having online access to everything can create questions which now need to be answered, which means more time and manpower are needed.  Rickman adds, “People have become encyclopedias where they have a little bit of knowledge from something they’ve read online without really understanding what they are talking about.”  As an example, he says that unit owners having read somewhere that roofing should not be done in the winter and objecting to winter work being done even though such jobs can actually still be done during the winter time. Furthermore he says, “people expect everything and everyone to be available 24/7, too.  If they want a balance sheet, they want it in five minutes and then they’re calling ten minutes later with questions after they’ve read it on their phones.”

This “hurry up and do it now” mentality is why Servidio says, “We have a small maintenance and cleaning division that we utilize to accommodate quicker response time for small repairs and to relieve the owners of mundane duties they don't want to do.”  As she explains, “We really strive for customer retention and try to adjust our business model as needed.”  

Staying customer-friendly, however, is not always easy, according to Phillips.  “As a general rule, what property management is supposed to provide is managing the day- to-day operations of the condominium’s common areas, but many times the expectations of the association boards are broader, where they want the management companies to do anything they are asked,” and this is sometimes without associations understanding the impact of what they are asking of the property managers.  As he explains, “Boards tend to meet at night, and if you have ten condos you manage, you may have several weeks in a row where you’re not getting home until 11 p.m. at night.”

This, of course, is just one of the prices for remaining competitive in the business, though, and staying ahead of the management curve.  “We have to stay on the cutting edge of back-office solutions and always look for new options,” says Servidio.

What those options look like can vary, however, for different management companies.  Phillips explains, “Some companies are simply becoming more selective about whom they take on to manage, choosing only larger condominium buildings to manage because they have bigger budgets to work with. Others try to make a profit through volume, managing a lot of condominium buildings. Many are trying to be profitable by selling other services to the associations.” 

For Rickman the key is to keep as much in-house as you can. “The more you offer the better,” he says. “Project management, financial management, snow removal maintenance—having staff at your beck and call not only allows you to have control, but if these services are offered through the management company, then it can be done with less cost to both the association and the company.”

All is not bad news, though, for the field of property management. Rickman explains that there are more condominium associations looking to hire property managers these days. “About 30 years ago there was a boom where developers built many condominiums, and now those buildings are reaching the limits of their material life.  As major building projects become necessary, associations which haven’t used property management companies in the past are reaching out now to property managers for their experience in how to handle and manage those needed maintenance and renovation projects.”  

This means that property managers have opportunities to be selective about whom they manage. “We have had many of our clients for years,” says Servidio, “and we don't want to impact current clients negatively by taking on more than we can handle.”  

Retaining Clients

Retaining clients for years is not always the case for all management companies these days, though. According to Phillips, “We were managing a building in the Back Bay, when a start-up said they’d do it for less money. I’d argue they couldn’t do it as well, but their price was obviously more appealing to the association.”

Price, though, isn’t the only reason for swapping management companies. Rickman explains, “Boards change all the time, and if a new board isn’t happy with something about the condominium complex, the members sometimes blame the property management company and replace them, thinking that a new property manager might be the solution.” While being replaced isn’t good for the old managing company, it does provide an opportunity for other managing companies to take the place of the outgoing company.

This makes it all the more important for management companies to have an online presence. Phillips, Rickman and Servidio all agree: No longer are people relying on word of mouth to choose their management company. More and more people are simply turning to the Internet, and they are expecting Requests for Proposals to be detailed, delineating individual costs versus one overall pricing structure. “RFPs,” explains Rickman, “have always been important, but we’re seeing that associations are expecting more professionalism in the bid requests, and it’s more about the detailed information and not just ‘We know this guy.’” 

“Associations,” adds Phillips, “have not changed in terms of what they are looking for, just in how they are looking.” With search engines being what they are, more and more are management companies find themselves needing to “work the system” so their company will show up early in the Google search.

“Everyone has online access these days,” says Rickman, “and they’re looking up property management companies while they’re on their lunch break with only so much time to spare. What they see on our website is going to determine whether they send me an email or not.  Only after they’ve decided to consider my company will they then speak to people who might give my company a good recommendation.” This is why Servidio says that her company’s goal is “to visit properties more often in person so owners and board members see us on site and realize we are checking on what’s happening physically at the property and to respond to the needs of the building without owners having to call and bring issues to our attention.”  When it comes to the property management field, it’s no different from other businesses:  One hopes that the personal touch will win out in the end.  

Paula Castner is a freelance writer and a frequent contributor to New England Condominium.