Self Managing Your HOA Isn’t as Risky as You Think

Key Takeaways

• Property management companies (PMCs) offer advantages to homeowners associations, but HOA self-management can save property owners thousands of dollars a year.
• For some, self-management can enhance community cohesion through the knowledge that board members and residents are working for their mutual benefit.
• Except for some specialized work, such as contract review, audits, tax preparation, and litigation, most tasks involved in HOA self-management are well within the capabilities of many community volunteers.
• Purpose-specific software such as PayHOA anticipates and automates many of those tasks and provides the transparency important to any nonprofit.

You may already be aware of countless worthwhile benefits to self managing your HOA. Still, it can seem like a time-consuming, intimidating venture that may not be worth the hassle. If you’re considering HOA self management, there are many factors to consider before taking the plunge.

You and your board member cohort will need to put in time, work, energy, and a dash of patience to make your self managed HOA work smoothly. Just because it will take effort doesn’t mean you’re jeopardizing the success of your organization.

If you’re already working with a third-party property management company (PMC) to oversee your HOA, you may be aware of some issues that can come along with them. A third-party company may enforce rules “by the book,” for instance, without the insight and nuance that resident volunteers might apply. Since the HOA board is ultimately responsible for its hired professionals’ work, when a PMC is perceived as operating too rigidly, the neighborhood becomes a little less neighborly and the board takes some blame.

If your PMC gets the job done, that’s great. But if you’re frustrated, why spend money on an outcome your HOA isn’t happy with? Even though it may seem like a risk to take the reins from third-party property managers, with the right tools, preparation, and mindset, self-managing your HOA will be rewarding.

If you’re considering striking out on your own but worried about the potential for failure, read on: It may be easier to run a successful self managed HOA than you think. Who better than you and your fellow board members knows what’s best for your HOA?

Learning to Run Your Self Managed HOA

You may think a third-party management company will know everything about running an HOA, and you’re probably right. And while they certainly know more about HOAs than most volunteers, they don’t know more about your HOA and what works best for your community. You 

In the long run, a willingness to grow, learn, and put in the effort is more important than prior knowledge. Thinking you don’t have all the prerequisite knowledge or skills to run your HOA could be the root of any trepidation towards trying self management.

A self managed HOA uses volunteers from the homeowner community to run the organization. When considering your team of volunteers, you may elect or assign roles to everyone, perhaps based on prior experiences or credentials. Your assembled team may be more knowledgeable than you think, each of them bringing abilities that complement the others.

Even if your HOA’s volunteers haven’t had much prior experience with bookkeeping or management, many tasks that comprise an HOA’s workload can be self-taught or learned by doing them. PayHOA management software exists for just this scenario: It anticipates and automates a host of tasks from banking and billing to online payments and late-payment reminders, eliminating much of the drudgery that previous generations of HOA volunteers endured.

Pay HOA self management software makes learning these new skills incredibly easy. From simplifying bookkeeping to streamlining communications to creating financial reports, the entire platform is designed to be intuitive, allowing virtually anyone reasonably familiar with personal computers to teach themselves how to use it. If someone encounters a problem, friendly tech support online or by phone (with American accents!) is part of PayHOA’s service. (Not only is learning said to be its own reward, but studies have shown that volunteering is beneficial for the people who do it.)

HOA Self Management Software Saves You Time

Self management will be a time commitment, but with the proper tools, it won’t be a huge one. Developers create innovations in technology daily, which means there are endless options to choose from when updating your organizational systems. 

Self-managing definitely involves in-person work—from making calls to residents to driving around to pick up and deposit checks, to maintaining the HOA’s bank account and budget.

Using the specialized HOA self management software will help streamline managing your organization. By automatically syncing with members’ bank accounts and accepting digital payments, HOA management software decreases the amount of time you spend organizing, bookkeeping, and receiving HOA dues. The capacity for electronic billing avoids the monthly drudgery of printing invoices, stuffing envelopes, stamping each, and worrying about lost or delayed mail the whole time.

In short, PayHOA’s purpose-specific software helps you and other board members reclaim much of the time the HOA otherwise might have claimed from your evenings and weekends.

HOA Self Management Software Makes the Hard Work Easier

No one wants to be the bad guy, but when late fees, fines, and violations crop up, someone has to enforce the rules. With HOA self management software, you can let the computer handle the weary work of sending out these notices.

Violations and fines can be issued directly from your HOA self management software to the homeowner’s email. This is more efficient for both you and the homeowner, and it depersonalizes the process so there will be less resentment between your HOA and the homeowners.

You can also send reminders to pay the fines and allow the recipient to pay online. With the data easily accessible online, your HOA can analyze any trends that appear. This can help you see which rules are working and which aren’t.

Ultimately, this helps your HOA create a better atmosphere for both volunteers and homeowners.

Call In Professionals When You Need Them

A self managed HOA doesn’t mean you have to do it all yourself. It’s a good idea to take a note from third-party property management companies, who often employ an outside CPA or lawyer to handle complicated accounting or legal matters. 

Laws for HOAs vary drastically by state, and while it’s a good idea to be familiar with your state’s particular laws, you don’t have to become a legal expert. It’s best practice for HOAs to keep an attorney on retainer to deal with legal implications and ensure compliance with applicable laws.

While it could seem interesting to learn all your local HOA laws or conduct your own financial audit, it’s best to leave certain tasks to the professionals. Even though the IRS provides instructions for filing HOA income tax, a lack of knowledge or a mistake could lead to a costly audit in the future. 

Self managed HOAs commonly hire an accountant and lawyer unaffiliated with the HOA. Having these expert, outside opinions makes these serious matters easier to tackle. Knowing these matters are taken care of by professionals should relieve a lot of stress from your HOA.

With a self managed HOA, you get to choose the accountant and lawyer you would like to work with. Third-party property management companies usually hire their first choices, regardless of expense, and charge you for their work.

Consider the Reward

For some personality types, self management can be more gratifying than using a third-party management company. You’ll make all the decisions and develop deeper connections with your residents. Yes, you’ll have to learn new things and adapt, but with the proper tools to help you, it won’t be a struggle.

Besides, what is more rewarding than creating a better HOA for your community? Do-it-yourself HOA management may be either intriguing or intimidating, but with the right attitude and tools, you can transform your organization into the HOA of your dreams.

While self-managing your HOA will take time and effort, reaping the benefits of your hard work will be completely worth it. Your self managed HOA will have successes to celebrate and only yourselves to thank.

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PayHOA offers an HOA management software solution for HOAs of any size or managerial priorities. To find out if PayHOA fits all your HOA management needs, try our software free for 30 days.