Self-managed or management company: an honest comparison

Every few years a board has the same conversation. The treasurer is tired, the management company has raised its fee again, or a new board member arrives from an association that does everything itself and asks why you pay someone. Both sides usually have a point.

There are plenty of models in between: an accountant for the books and the board doing the rest, a company for the finances and a caretaker for the building, a professional manager for everything. The real question is not self-managed or not. It is which tasks you keep, and who carries them when the volunteer doing them moves away.

What a management company actually does

In the Nordics, management usually splits into financial administration (billing, payments, reminders, bookkeeping, the annual accounts) and technical management (maintenance, contractors, inspections, repair requests). In Finland the housing company manager, the isännöitsijä, has a defined role and usually attends board and general meetings. In Sweden and Estonia it is more common to buy the pieces separately. Read the contract carefully: the base fee often covers less than the board assumes, and extra meetings, project management and anything out of hours are frequently billed by the hour.

Prices vary a lot by country, city and size. For a 40-flat building, the quotes we see for financial administration alone often land somewhere between €4,000 and €8,000 a year, and full management with technical services can easily be double that. Get several quotes. The spread is usually wider than people expect.

The case for doing it yourselves

Self-managed associations are often cheaper and quicker. The board knows the building, residents know who to call, and a leaking tap doesn't go through a ticket queue three cities away. The savings are real: on the figures above, €100 to €200 per flat per year, which is a noticeable part of the fee in a small building.

The cost is people. Self-management works when two or three board members have the time, are comfortable with spreadsheets and bank files, and don't mind a phone call at seven in the evening. It works much less well when one person does everything. If the treasurer who runs billing falls ill in November, can anyone else send the December invoices? If the answer is no, you don't have a self-managed association. You have a single point of failure.

The case for a management company

A good company brings continuity: people who have handled a hundred pipe replacements, who know which contractors finish on time, who keep the books the same way whoever sits on the board this year. Board turnover stops being a crisis. Changes in accounting rules and legislation become someone else's job to follow. For large associations, or ones facing a major renovation, that experience can save more than it costs.

The usual complaints are distance and slow answers. The manager looks after forty other buildings, the board waits a week for a reply, and residents feel nobody is responsible. Those are contract and relationship problems as much as problems with the model, and they are worth raising before you sign.

Questions to ask before signing

• What exactly is in the base fee, and what is billed by the hour? Ask for last year's typical extra charges for a building like yours.
• Who is our named contact, how many buildings do they look after, and who covers when they are on holiday?
• How do residents report problems, and how fast do you respond to something urgent at night?
• Can the board see invoices, payments and arrears directly, at any time, without asking?
• If we leave, how do we get our data out: ledgers, owner register, meter history, documents?
• What is the notice period, and are there any exit fees?
• Can we speak to two boards you have worked with for more than three years?

Splitting the work is often the answer

Many associations end up with a mix. Monthly billing and payments are the most repetitive tasks and the easiest to systematise, so they are good candidates to keep in-house with decent software, while the annual accounts go to an accountant and large projects to a consultant. Others do the opposite and hand over the money while keeping the building. Either way, write down who does what, keep copies of everything in the association's own systems, and make sure at least two people know how each task is done.

Whatever you choose, revisit it every few years. The right answer for a board of retirees with time on their hands is not necessarily the right answer when they hand over to a board of young parents.

If you keep billing in-house, Kelvo Nest handles invoices, bank imports and reminders. It is free for up to 10 units for six months, then €2 per unit per month, and residents never pay. See pricing.