Dear PoPville – Benefits and Drawbacks of self managing a condo?

Photo by PoPville flickr user clif_burns

“Dear PoPville,

What are the benefits and drawbacks of self managing a condo? Our condo is a 6 unit rowhouse conversion and we wanted to hear others’ thoughts about their experience, benefits, drawbacks, the process, things to consider etc. With the rise of small condo buildings it might be something that others in the DC area are considering and/or are currently undertaking.”

15 Comment

  • There are pros and cons to self managing. If seeking to keep costs low and if you have someone who is willing (and capable!) of overseeing the financials and bills (for us there was water, electricity, fire monitoring, phone line for fire alarm, master insurance policy) – then go for it. For our small three-unit condo, all the owners were super busy and it meant more to us to pay the 80 dollars a month to hire a management company. Also, it got a bit awkward when one person did not pay their fees. The management company made it so we weren’t constantly having to harass someone to pay their bills.

    • would you mind sharing which management company you used? 80 dollars a month sounds very reasonable – even if its per person. Thanks!

  • I moved a few months ago to a new eight-unit condo and we decided to self manage for the first year (not sure many go from managed to self-managed). So far, so good…but I’d imagine your fellow owners would be key to the model working (how many have time/willingness to step up, etc.).

  • binpetworth

    My small building looked into mgmt companies a few years back but found the cost prohibitive. In the end, automating the shared bills (there aren’t many) and rotating responsibilities for the occasional paperwork has worked fine for us, but admittedly I’ve been lucky to have great neighbors.

  • I also live in a 6-unit building and we’ve self-managed for the past year and a half. Obviously, the benefit is relatively low condo fees. Drawbacks are that you’ll have to do everything yourselves. I just spent an hour on the phone with Verizon to set up our building’s call-box; one of my neighbors is figuring out how to get our hallway carpet cleaned; another collects dues and keeps the books. FWIW, I feel like I’m closer to my neighbors because we work together and we always have something to talk about when we run in to each other.

    Whether self-management is right for you will depend on your building and the folks who live there. Our arrangement works as well as it does because the homeowners all get along really well and are willing to take an active role in the building. If my neighbors were different, though, I could easily see it being easier to hire a management company.

    I’d recommend you do what I did at the beginning: Get together with your neighbors and talk about it. It’d probably be helpful to get some estimates from a management company before that meeting so you can make an informed decision. And you can always just TRY self-managing for a few months and if you all hate it, hire a company.

  • I have lived in two self managed buildings and it has been pretty easy. It requires cooperation from the residents but have not had problems at either building.

  • I lived in a three unit self managed condo building. Our shared bills were the master insurance policy and water. We also shared building maintenance costs, etc. The cost savings arising from being self-managed was huge and allowed us to keep condo fees at minimal levels. Hardest part was incorporating the HOA that managed the property. A lawyer could help for a few hundred bucks.

  • A self-managed condo will be as sane as its craziest owner.

  • I’ve done both. My managed building had about 100 units and my self managed one has 4, so they were different experiences. I really like self managed. It has worked out well so far. In a managed building, you have to call the manager to get anything done, then the manager calls a bunch of people, then calls you back. Then the owners make a decision and have to call the manager, who calls the person who wins the bid. It just all seems to take longer. As long as you have someone willing to serve as treasurer (run the accounts) and the rest of you split the other work, it should be ok.

    One thing I will say is that if you are self managed make sure you are realistic about how much you need in your reserve fund. You need enough to cover at least your insurance deductible and then project out for major expenses like roof repair or deck sealing and save for that. With self managing you don’t have that neutral third party to keep an eye out for those thing and tell you the hard truth when it is time to raise fees.

  • These were really useful, thanks. My 8 unit building has one commercial property in it and that might muddy the process. Anyone recommended a property management company that handles these boutique properties?

    • New Washington Land Company is reasonable and very responsive. But just hiring a company to take care of the books still means somebody has to replace lighbulbs, throw out trash in common areas, take care of lawns, handle issues with trash hauling, Verizon (for call box), common area cleaning, minor repairs, negotiating master insurance policy, and handle any emergencies (plumbing problems, water heater failing, etc etc etc)… a compromise is to let NWLC do the books (including paying corporation tax, annual govt filings, hiring an audit company, etc). and paying somebody in the building to be the main contact person for other stuff…

  • One thing to keep in mind is that management company will make sure you’re following all the laws and doing everything according to the laws.

    I was part of a 5 member master association that that was responsible for 2 short streets (including sidewalks & lights). We self managed for years (& it was like that when I got on the board). I realized about a year in that we weren’t paying our taxes and hadn’t been for years because no one thought of it and for all of us on the board at that time it had always been that way. That was a messy & expensive problem to fix that a management company would have never allowed to happen. Also a management company can get better deals with contractors because they tend to use the same company for multiple projects so you get a better deal even if your small.

  • i live in a 4-unit converted house and we self-manage. benefit- not paying a management company keeps your condo fees low. mine are the lowest of anyone that i know who owns a condo in this area. drawback- you and your neighbors do everything yourselves and you have to take off of work to do it many times.

    basically, everyone has to be invested. it’s got to be the kind of building where the owners live there and care what happens. you’ve gotta have and be a good neighbor and just agree to trade things off. you do have to be more diligent about legal issues and especially whoever is being treasurer has to be on the ball.

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