When looking to own property, there’s always an array of factors to consider: age of the building, inspections, regular upkeep and more. For some, an important aspect to think about is whether prospective building owners are prepared to be their own supers or not. Self-managed building owners are faced with the responsibility of dealing with everyday concern—between maintenance issues and tenant complaints. Whereas some buildings tend to outsource these duties to professional management companies, many smaller buildings tend to be self-managed.
But to determine whether you’re better suited for self-management versus seeking assistance from a third-party management company, there are several criteria to keep in mind. What does it mean to be self-managed? What do the responsibilities entail?
For starters, the biggest difference between buildings that are self-managed versus those that aren’t is the size of the property. Smaller buildings that have fewer units tend to be easier to manage. These buildings, such as those in Park Slope, typically have less of a reserve fund or cash balance and are capable of being well-kept with minimal effort. In these cases, hiring a management company may be superfluous and an unnecessary addition to budgetary costs. Consequently, the biggest perk known to self-managing is the low monthly cost.
But while that may seem like a draw, it’s important to be aware of the nuances before making the decision. Otherwise, you may just end up stuck spending all the money that you could save on hiring help. Here are some things to consider before taking the plunge.
Ask the Expert
Like any project, understanding the parameters and expectations is key. There’s no way to fully understand what you’re getting yourself into until you know the details surrounding the endeavor. It’s in your best interest to hire the necessary experts to consult with and stay well-informed throughout the process. With their specialized knowledge, they can keep you apprised on the important facets. Doing the research is half the battle as you work to understand the nuances involved and that includes turning to trained professionals for insight.
Some experts to consider hiring in order to understand the breadth of a building’s requirements are lawyers, engineers, and accountants. These are the people that can help you determine the risks and worth of investing in a self-managed building and, hopefully, save you a lot of money in the long run. An engineer can help discern whether there are any major repairs or expenses to be expected. This is helpful to know because if the cost of repairs is projected to be too great, it just may not be worth it to invest in a self-managed building. Despite the savings from not hiring an outside management company, if a building has too many issues that it may require consistent repairs, it may not be worth the investment.
Studying Up
Having a strong understanding of the building’s audited financial statements and speaking to the building’s treasurer to gather the necessary numbers is helpful to approach building finances strategically. This lets you determine how much of a budget the building has at its disposal and whether there are any projected expenses. Hiring your own personal accountant and lawyer for a second opinion can offer you perspective on what type of agreement you might be signing.
Moreover, it helps determine whether you’ll have to seek professionals for certain tasks and if you have the funds for it in your budget. While self-managed buildings mean that you don’t have a costly monthly expenditure allocated to a third-party management company, you still may have to resort to hiring certain specialists to deal with issues outside your scope of knowledge, such as an exterminator or an HVAC repair person.
If the prospect of self-managing an apartment feels intimidating, there are ways to ease that. Workshop classes can offer insight and helpful tips for the process, so when the time comes to manage the building, you’re equipped with the knowledge on what to expect and how to handle major tasks. Courses are offered by the National Association of Residential Property Managers that educate property managers on how to carry out the basic necessities involved as a super. Additionally, President of Real Estate Management Group, Rebecca Poole, has provided management and consultation workshops that has gained traction over the last few years, garnering the attention of property managers of buildings that aren’t self-managed.
The doing-it-yourself trend is all the craze these days, even in the property management space. Why not consider if you’re ready to jump on the bandwagon with your building?
