Property manager vs. HOA management company: aerial view of a Houston community with apartments and single-family homes

Whether your property is a townhome or a house that is part of a larger community, most benefit from having a management entity in place for everything from repairs to amenities. The question then becomes, “Do I need a property manager or a HOA (homeowner’s association) management company?” The answer can usually be found in the type of property or properties that are needing to be managed.

The best place to start can be learning what a property manager and an HOA management company are and then comparing their services and abilities to see which best matches your specific needs. In many cases, an HOA management company can be the best way to go.

What is a Property Manager?

A property manager is an entity that manages a specific property, such as a townhome, a single-family home or an apartment complex. They make decisions based on the properties run under their management only.

These entities tend to operate on a smaller scale when it comes to repairs and maintenance than those managers that oversee an entire community. It is crucial to read the fine print before signing with a property manager as there tends to be less consistency for this type of operation than there can be with their larger counterparts.

A property manager’s basic duties can include:

  • Handling or coordinating property maintenance
  • Setting and collecting rent from tenants
  • Managing the property budget

What is an HOA Management Company?

An HOA management company can be instrumental in helping to manage large communities, rather than a single building or complex. These entities also tend to have a built-in checks and balances system since they do not typically independently govern a community. An HOA management company is instead simply an extension of a neighborhood HOA.

Some of the basic duties adopted by HOA management companies to better assist HOAs are:

  • Amenity maintenance and survey. This usually means site visits to ensure that amenities such as walking trails, tennis courts, swimming pools, and more are in good working order. Any improvements or upgrades that are deemed necessary upon inspection can be referred to the HOA.
  • Assisting with the collection of annual association dues from neighborhood residents.
  • Enforcing consistent property maintenance. The disrepair of a property can impact the properties around it. By helping to enforce an HOA’s property guidelines and rules, this can also contribute to the stabilization of neighborhood property values.
  • Financial management. These companies assist HOAs with basic financial housekeeping duties such as accounting, payment of approved vendors, record keeping, and developing an annual budget for the HOA.

Property Manager and HOA Management Company Similarities

Property Managers and HOA management companies are designed to help a specific property and/or a community run more smoothly, from repairs to amenity maintenance to property value. In addition to this primary similarity, there are several ways in which these two types of management are alike.

They keep you from having to go it alone

Regardless of if you are a tenant in their property or a homeowner in their community, having management to fall back on can keep you from having to go it alone when certain property issues arise.

Vacancies say a lot about them

Whether it a smaller property or a neighborhood community, the number of vacancies they have can say quite a bit about the success of their manager. Too many vacancies can indicate an issue whereas a full property or community tends to indicate a more stable housing trend.

Property Manager and HOA Management Company Differences

Although both property managers and HOA home management companies can be helpful for residents, the two share far more differences than similarities. For example, some of the things to consider before choosing which type of management you need can include:

Reputation

A large HOA management company’s reputation can be easier to establish and trace, but even if it is more difficult to determine, a smaller property manager still must have adequate referrals and a good industry reputation.

Experience

It is usually a given that an HOA management company manages a number of properties, sometimes in multiple cities, and therefore will have sufficient experience. But before choosing a property manager, verify how many properties he or she has managed at one time in the past to ensure they can handle the workload.

Leadership

Property managers usually represent themselves, whereas an HOA management company represents a volunteer led board of directors that make up the neighborhood HOA. Another important distinction regarding leadership is that a property manager works alone whereas an HOA management company typically employs a team of people that work together.

Property ownership

A property manager could potentially own one of the properties they are managing. This should raise a red flag as it may be possible that they could make management decisions based on what is best for their property rather than considering others under their care. Large HOA management companies typically do not own property within a neighborhood they manage.

Amenities maintenance

While part of an HOA management company’s description is usually to maintain amenities, this does not necessarily hold true for a property manager. Those under the care of a property manager should ensure ahead of time how they handle maintenance issues.

Whether you are an apartment complex, town home, or an HOA run community looking for assistance with management, please reach out to Sterling ASI for more information and to see how we can play a role in making your community a better place to live.

Frequently Asked Questions About Property Managers and HOA Management Companies

Who does an HOA management company work for, compared with a property manager?
A property manager works for a property owner, usually a landlord or investor, and makes decisions about that owner’s buildings and tenants. An HOA management company works for the association itself, taking direction from the volunteer board of directors that homeowners elect. The board sets policy and approves budgets and contracts, and the management company carries out that direction day to day. For a full picture of that role, read what an HOA management company does.
Can a regular property management company manage our HOA?
Some firms do both, but rental management and association management are different jobs. Running an HOA means preparing an annual budget, planning reserves, holding board and annual meetings, collecting assessments, and enforcing deed restrictions under Texas Property Code Chapter 209. Ask any firm how many associations it manages today, who will attend your board meetings, and what is included in its contract. Our breakdown of what a full-service HOA management contract includes gives you a checklist to compare against.
Which one does a condominium or townhome association need?
An association, not a single owner, governs the shared roofs, walls, grounds, and amenities in most condo and townhome communities, so association management is usually the better fit. Texas condominiums follow the Texas Uniform Condominium Act (Property Code Chapter 82), and many older Texas condos were created as horizontal property regimes, so the rules can differ from a single-family HOA. See how condo association management differs from an HOA and our guide to the horizontal property regime in Texas.
How are fees structured for a property manager versus an HOA management company?
Rental property managers commonly charge a percentage of the rent they collect, plus leasing or tenant placement fees. HOA management companies usually quote a monthly fee for the association based on community size and the scope of services, with some tasks priced separately. Because scopes vary so widely, compare proposals line by line rather than by the headline number. Our post on the hidden costs of bargain HOA management shows which fees to ask about.
Do property managers and HOA managers need a license in Texas?
Someone who leases or manages rental property for others in Texas for a fee generally must hold a real estate license through the Texas Real Estate Commission. Texas does not have the same state license for community association managers, so boards often look for professional credentials such as CAI’s CMCA or AMS designations and a track record with Texas associations. Equally important is how the company keeps the board compliant with state law, covered in our post on how HOA management companies keep boards on the right side of the law.
Who collects HOA dues and handles delinquent accounts?
In an HOA, the management company collects assessments on the board’s behalf, posts payments, sends statements, and follows the board’s collection policy. Texas law sets specific notice and payment plan steps before certain fees can be charged or an account goes to a collection agent, so the process matters as much as the result. A property manager, by contrast, collects rent from tenants for a landlord. Our board guide to delinquent HOA dues in Texas walks through a fair, legal collection process.
If I rent out my home in an HOA, do I need both?
Often, yes, because they cover different things. Your property manager handles your tenant, the lease, and repairs inside your home. The HOA management company handles the community’s common areas and enforces the deed restrictions that apply to every lot, including rentals. As the owner, you remain responsible for paying assessments and correcting violations your tenant causes, so make sure your lease and your property manager follow the deed restrictions that govern your property.
How do we know if our association is ready to hire HOA management or switch companies?
Common signs include board members spending nights and weekends on vendor calls and paperwork, late or unclear financial reports, slow responses to homeowners, and rising delinquencies. Start with our guide to how Houston boards choose an HOA management company, and if you already have a manager, use our checklist on how to switch HOA management companies in Texas. When you are ready to talk scope, review Sterling ASI’s HOA and community association management services and request a proposal or call 832-678-4500.

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By on October 9, 2020   /   Blog   /   Leave a comment

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