​Self Management Vs Professional Management.

In this Tenth episode of our communal property essentials series I’m going to cover the pros and cons of self-managing your building or using the services of a communal property professional.

Episode 10 of our Communal Property Essentials Series.


Video Transcript

In this Tenth episode of our communal property essentials series I’m going to cover the pros and cons of self-managing your building or using the services of a communal property professional.

I have a bias in being a professional Property Manager, so it may surprise you when I say that I am not against self-management of apartment buildings. There are many circumstances where self-management is a viable option, and some where it is not. 

Committees right to contract.

While the management committee are the ultimate authority when it comes to the decision making of a apartment building or resort and are put in charge of the finances, administration and management.  The regulations recognise that these volunteer committee members may not have the necessary time, ability, skills or experience to fulfil all the day to day tasks of running communal property.

So these regulations allow the committee to decide to employ a individual or company to assist them with their duties, and the cost for this is a communal expense and can be included in the communal budget.

So how do you decide what to keep in-house and when to hire these tasks out.

Assess your committees skills and available time.

The first step to take when considering the option of self-management is to assess the skill levels of the members of your management committee

If you are looking at self-management you will need someone with good book keeping skills, preferably someone with some form of accounting training.  They also need to be able to deal with debtors and difficult owners as the collection of the communal fund can be a time intensive and sole destroying task.

You will also need someone who can handle large scale project management, some experience of dealing with third party contractors, setting up strong operational structures and so on.

Also you will want someone who is good at recordkeeping and can work with owner databases, setup email mail merges, write notices /letters and minutes.

The next step is to assess the time commitments required to fulfil these roles as not just important to have the necessary skills, these individuals need to be willing and able to commit to the time required to fulfil these roles.  There is simply no point having a fully qualified accountant on the committee if they work 60 hours a week while juggling family and personal commitments.

Self-Management can be expensive.

If you have these type of individuals, and they have the time available to fulfil their tasks then 100% self-management is a good option and will ensure you have complete control while keeping costs down.

But the most common reason we find for buildings self-managing is not because they can do everything in-house but because they have financial problems, and are trying to save money. If this is the case, then self-management is NOT the solution. It’s a dangerous trap with potentially devastating consequences.

Most of these scenarios end up with individuals without enough time and/or experience dealing with essential tasks like credit control and administration. This can result in higher default rates, which generally makes the communal fees for each owner being higher than a development which is professionally managed. 

Also this can result in a higher risk of liabilities as they are more likely to miss an important requirement of their duties.

Consider a hyrid solution

Only a few years ago you effectively had two choices, 1) to use a property manager to fully manage your building or 2) do it all in-house.

Now the industry has evolved. While there are still a number of companies that only offer full service packages (and there is nothing wrong with specialising in a service), many property managers will offer custom services to perform specific key tasks.

The building can benefit from using the committee to organise the direct staff, use that local pool cleaner you like, but also have a professional property manager handle the collection of the communal fund, or the administration, or the record keeping, or a combination.

You need to find out what balance you want. How many and what specific tasks do you want to keep in-house and what do you want to hire out to a professional?

Well that covers the essentials on self vs professional management.  In the next episode of the communal property essentials video series I will cover how to properly plan for major maintenance works on your apartment building / resort.


USEFUL LINKS

Ultimate Committee Handbook

Get your copy of the Ultimate Committee Handbook, the #1 Resource for Apartment Building and Resort Management Committees In Cyprus written by the Award Winning Communal Property Expert – Russell Flick.  www.UltimateCommitteeHandbook.com

More Articles & Videos on Communal Property Ownership, Administration & Management

Visit https://www.cypruscommunalguide.com/ for more articles, videos and advice on all aspects of Apartment and Communal property ownership from setting up a committee, getting communal payments in, organising the AGM or simply administrating and maintaining your building. Russell Flick Founder of the Cyprus Communal Guide. "Helping you unlock your buildings True Potential" www.RussellFlick.com

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www.Hub.CyprusCommunalGuide.com

Have any Questions on this topic or have a suggestion for a future topic.

Do you have a question on this video or any other aspect of communal property management & Ownership, head over to our Facebook Group page and post your question.

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Need 1-1 Support, Advice or Property Management Services From Russell Flick and his team.

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Russell Flick

International Property Professional, Public Speaker & Author of 'The Ultimate Committee Handbook'. In addition to his published books, Russell is a public speaker, columnist and founder of www.CyprusCommunalGuide.com, the online information portal for property owners to get support and advice on all aspects of communal property ownership and management. Russell is currently in the process of publishing his second book (expected to be released in 2018) the 'Step-by-Step Guide to Owning Investment Property'. While the first book is aimed as a support resource for committees, giving step by step instructions on the management and administration of their buildings. This second book is is a practical guide to assist property owners and investors with information and procedures in acquiring, maintaining and maximizing their property investments.