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Property Management Fees vs. HOA Fees – What’s the Difference?

Property Management Fees vs. HOA Fees – What’s the Difference?Many people mistakenly believe that property management and HOA management are the same thing. In fact, the two are decidedly different in a number of ways. From a high level view, property management involves the day to day management of rental properties, either residential or commercial (or both). HOA management, however, refers to the management of homeowners associations. Not surprisingly, the two have very different fees associated with their duties. Here more info below.

What do property management fees cover?

There are a number of different tasks that are handled by a property manager (or property management firm), which are built into and covered by the fees they charge. Some of these tasks and duties include, but are not necessarily limited to:

  • Advertising vacant rental units
  • Showing properties
  • Managing the tenant application process
  • Screening prospective tenants
  • Handling the lease agreement
  • Ensuring compliance with lease terms
  • Collecting and depositing rent payments
  • Coordinating property maintenance, cleaning and repairs
  • Resolving tenant complaints or disputes

What do HOA fees cover?

Again, while there may be occasional overlap, the tasks of an HOA manager are quite different from those of a property manager. As such, HOA fees typically cover the following activities:

  • Maintenance of common areas
  • Coordination with vendors
  • Holding board meetings
  • Collection of dues
  • Assistance with budget planning and execution
  • Sending out notices on behalf of the board
  • Communicating with homeowners
  • Ensuring compliance with governing documents and the law
  • Liaising between homeowners and the HOA board

How are property management fees calculated and collected?

Property managers typically assess their base fees one of two ways: as a percentage of the rent or as a flat rate. There are also a number of other fees commonly assessed by property managers that owners should be aware of, including:

  • Initial set up fees
  • New tenant placement fees
  • Vacancy fees
  • Maintenance fees
  • Eviction fees
  • Early termination fees

What should I expect with HOA fees?

HOA fees are typically pulled from what homeowners are required to pay in order to be a part of the association. Among other things, some of the typical charges they will assess for include:

  • Initiation fees
  • Monthly management fees
  • Early termination fees
  • Other “al a carte” fees for certain services

Is paying property management and/or HOA fees worth it?

If you are part of an HOA, there is likely no way to avoid paying fees. Property owners, on the other hand, have the option to manage their investments on their own or hire a person or company to do it on their behalf. There’s no right or wrong answer, however, given the amount of work that goes into managing properties – especially when there are several of them – outsourcing these tasks can be well worth the cost.

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