Altin Nani President Duka Property Management Inc.
Condo Fees
Deciphering Condo Management Fees Discussing Profit Can be Contentious at Times, But Profit is Necessary to Keep These Services Available for Boards, and Their Buildings, to Use
With that said, it is too simplistic to reduce the validity and competitiveness of management proposals down to price alone. Picking the cheapest offer might save your building some funds, but at what cost? Managing a building comes at a set cost, and not all of it has to be financial; the portion of costs that are not covered by what you pay are eventually reflected in poor service and maintenance. Alas, low prices are usually too good to be true. For condo boards, comparing proposals on price alone ignores the multitude of other factors that play a large role in the maintenance and performance of the property. How good will the hired manager be? What supporting staff will
they have available to them? What is the firm’s experience with similar buildings? These are all questions whose answers lie beyond the price spectrum. Therefore, management proposals should not be observed as “cheap versus expensive”, but rather under the lens of whether or not the fee is correct. What does it mean for a fee to be correct? The most correct fee is the one that most holistically and accurately represents the condo corporation’s needs and offers appropriate services and action to fulfill those needs. Evaluating the correctness of a management proposal can be broken down into four categories: the salaries of site personnel, the cost of accounting staff, the cost of overhead, and the profit margin. Salaries The rapid development of new properties has increased the demand for property managers to unforeseen highs. In response, the salaries of property managers has increased (according to my estimates) to anywhere from 15% to over 50% in some cases. This is reflective of the already polarizing nature of management
salaries, where job sites (e.g. Nuevoo, Indeed, etc.) list entry-level salaries at $37K, but with the potential to climb to over $100K with experience. The other consequence of rapid development, especially with the abundance of new high-rise buildings, is the new requisite of having larger management teams; having assistant property managers, site administrators, and, has become the new norm. The average salary of an administrator is roughly $40K, not to mention that running these larger sites requires an experienced property manager that would need to be compensated appropriately. Nevertheless, site administrators are becoming increasingly crucial figures to condo management; they are the ones primarily dealing with day-to-day operations as the manager deals with larger issues. Most administrators are also typically managers in training, looking to gain experience as they complete their management courses to obtain their certification. While they may enter the position with little applicable experience, they are promoted to managers at an accelerating rate. CONDOVOICE FALL 2020
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ILLUSTRATION BY JASON SCHNEIDER
Proposals are complicated. There is no other way around the topic. There is no single tried and true formula that is universally used in the industry to determine how much management companies will charge a condo corporation. Differing company philosophies and business considerations in the management industry result in price ranges so extreme that they would make even a pendulum blush.
