As a homeowner, and if you’re interested in association management pricing, probably a board member – one of the primary concerns you may have when hiring an association management company is the cost of their services. While every management company sets their own fees, there are several factors that determine how much they charge. In this article, we will explore the factors that influence the cost of association management services and provide insights to help you make an informed decision when selecting a company.
A word of caution – be wary of any company/manager that will toss out a number or provide a flat fee per “door” without a full request for proposal. Ballpark? Sure. But advertsied flat rates should be a red flag 🚩.
Factors that Influence Association Management Costs
- Size of the Community: The size of your community is a significant factor in determining the cost of association management services. Larger communities require more resources, including staff and technology, to manage effectively. Consequently, association management companies often charge more for larger communities than they do for smaller ones.
- Type of Services Required: Another factor that influences the cost of association management services is the type of services required. The more comprehensive the services, the higher the cost. For example, if you require maintenance, accounting, and administrative services, you can expect to pay more than if you only need administrative services.
- Location: Association management companies in different regions may have varying fees. This is due to the cost of living in those areas and the competition among management companies. Therefore, companies in areas with a high cost of living may charge more than those in areas with a lower cost of living.
- Level of Experience: The level of experience of an association management company also affects the cost of their services. Companies that have been in the industry for a long time and have extensive experience managing different communities charge more than newer companies. However, newer companies have more to prove.
Association Management Fee Structures
Association management companies typically offer three types of fee structures: fixed fees, variable fees, or a combination.
- Fixed Fees: Fixed fees are a set amount that the management company charges for their services each month. These fees are typically charged for administrative services and are determined by the size of the community.
- Variable Fees: Variable fees are charged based on the type of services required. For example, if your community needs maintenance services, the management company may charge an additional fee. Variable fees may also be charged for consulting services and special projects.
- Fixed and Variable Fees: Many companies will provide a rate for their base services with other fees being charged for additional servcies provided. Read the contract and know what you’re agreeding to as variable fees can grow quickly.
How Much Do Association Management Companies Charge?
Association management fees vary depending on the factors mentioned above. On average, however, most companies charge between $10-$15 per month per unit for administrative services. The fee may be higher if the community requires additional services. At The Pineapple Brand Company we shy away from dollar per door amounts and instead provide detailed quotes based on services defined in the request for proposal. That way associations pay for the services they need and none of the ones they don’t.
When selecting an association management company, it is important to consider the quality of their services as well as the cost. A lower fee may seem appealing, but it may result in inferior services. On the other hand, higher fees may not always guarantee top-quality services. Therefore, it is important to do your research and compare different companies before making a decision. Remember, if you pay peanuts you may get monkeys or possibly the whole circus!
The cost of association management services depends on several factors, including the size of the community, type of services required, location, and level of experience of the management company. When “shopping” for a new management company, create a RFP or Request for Proposal to standardize your request to each company. It will help you compare fees for the same services. It is also essential to consider the quality of services to ensure that you get the best value for your money.
If you’d like a proposal from The Pineapple Brand Company – Send us your RFP.
Like this post? Perhaps you’ll like these other posts:
- Are HOA Fees Deductible?
- The Benefits of Implementing Technology in HOA Property Management
- What are the Benefits of an HOA Management Company?