Considering Community Associations (JPM)
IREM member shares his strategies on evaluating whether to take on management of these properties
by Michael E. Packard, CPM
The following is an excerpt from the Jan/Feb 2009 issue (Volume 74, Number 1) of JPM�, Journal of Property Management.����
As is common for many of us well established in the real estate management business today, we enter the field by happenstance or because an opportunity came our way.
Thirty-five years ago, I was working as a stockbroker in Los Angeles when an old friend of mine, James Loomis, CPM, contacted me on day with the idea of joining him in his property management business. His idea was to expand his firm�s base from Orange County, Calif., to San Diego County where he had recently contracted to manage a very large community association. With the stock market in the doldrums, I decided to accept the offer.
In the 1970s, to be considered a professional in the property management industry, you had to be a CPM. Along with the challenges of starting a new division, I was also required by Jim and his father to obtain my CPM designation. I am so grateful they insisted on this endeavor for my career, as the designation and IREM membership have rendered more rewards than I ever could have imagined.
With the new community association management division of our firm in place, we started to reap the rewards of increasing our community association portfolio along with apartments, single-family homes and commercial properties. The condominium market was in its early stages, and we were in a great position to grow.
Despite our increasing portfolio size resulting from our additional community association management business, we soon realized a unique challenge in this particular real estate niche�the community association fees we obtained were relatively low compared to the fees of the other types of real estate we managed. This was the case back then and continues to be true today. Although profits for community association management companies have improved somewhat over the past 35 years, they are still not keeping pace with traditional commercial or apartment management companies.
Thus I can share several ideas and strategies to ensure the business of community association management is well worth your company�s time and effort. It may not be as straightforward as management of other property types, but it can certainly become a feasible property type to add to your management portfolio.
The full article is available as an online exclusive in the Jan/Feb 2009 issue (Volume 74, Number 1) of JPM�, Journal of Property Management.�
IREM Members have free access to the JPM� online archives and the �Online Exclusives,� articles that are only available on the IREM Web site. Non-members can subscribe to JPM� at www.irem.org/jpm.�