Steve Barber, CPM, is seeing double.
In the last three years, Barber, president and owner of Invest West has watched business double in the company's community and homeowner association management division. It now manages 35 communities and 5,000 units. Invest West is a full-service management company and brokerage house based out of Vancouver, Wash.
"We saw the virtue of [association management] becoming an important aspect of a full-service management company's services," he said. "This has kept us in the portfolio loop. It changed our income base."
Invest West isn't the only company expanding its association management division. An estimated 286,000 housing communities--including condominiums, homeowners associations, cooperatives and other planned communities--are association-governed, according to information from the Community Associations Institute.
With the number of associations at an all-time high, the demand for association managers is stronger than ever--offering real estate management companies more management opportunities and a chance to mix up their portfolios.
"It's the new horizon in professional management," Barber said. "It can only grow more and more. This is an important niche for property managers to move forward and expand their expertise."
MEETING THE NEED
The condo boom that overtook the market during the last several years has inspired this surge in business, Barber said. Long-term apartment investors were getting out of the business because their apartments were in disrepair and needed work. He said they could often get a good cut by jumping ship and selling their properties to a developer.
At the same time, owners and investors who didn't want to get out of the business entirely, had to break into association management because there were fewer apartments to manage, and they wanted to keep their companies afloat, said Barbara Holland, CPM, and owner of H & L Realty and Management Company in Las Vegas.
"There has been a nationwide trend to convert apartments to condominiums, so many of the traditional management companies who managed income-losing properties have been forced to incorporate association management in order to protect their bottom line," Holland said.
Even as conversions slow, Barber said the demand for condominiums isn't likely to cease considering population growth and increased density. That demand will encourage growth in association management, he said, because association board members often want to shed some responsibility attached to running an association while maintaining control.
"We're the buffer," Barber said of community association managers. "Our efforts let [board members] have normal lifestyles and still be leaders in their community. They can use us as a backup."
Community association board members aren't the sole benefactors of real estate management firms offering association management services. Managing community associations is another way for companies to bring in extra income and help pad the bottom line.
"Eventually folks are going to have to start dabbling in a mix of management [opportunities]," Barber said, "and association management is an untapped source of additional professional management income."
Before a company or manager decides to introduce association management into the portfolio mix, an association manager's role should be clearly understood. Community association management is an entirely different beast from other forms of management, practitioners said.
Community association management is distinguished by a manager's responsibility to report to a community association's board of directors, as well as individual residents. All decisions up for consideration must be approved by the board.
"We're the balancers," Holland said. …