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The Value of Good Management


Penny wise and pound foolish: The quality of management can dramatically impact operational costs, the quality of life for the residents and the increase of their property’s value.
 
Buying a home is most people's biggest financial investment. The main objective of a Community of Owners is to ensure that the value of their properties is maintained and increases over the years. This is the key driver of Resortalia´s services offer.
 
To determine a property value, however, is not an exact science. Property values are often conditioned by the marketability of the home and its surrounding community.
 
Communities develop their own reputation. Some of them are well managed and maintained, and are valued by their residents by providing efficient services, ensuring the enjoyment of the place where they live. As a result, these communities often achieve greater increase in property values than others. And the reason can usually be attributed to good management.
 
So what is the value of good management...and likewise the cost of poor management? Let’s put an example: If a community has 1000 homes, and each home has an average market value of 200.000 Euros, then the total collective property value of the community would be 200 millions of Euros (1.000 homes x 200.000 Euros). If, as a result of being well managed and maintained, the value of each property within that community rose, let´s say, 5% instead of 4% in a year, then the increase of the collective property value, achieved through good management, would equate to an astounding 2 millions of Euros (200 millions of euros x 1%).
 
The value of good management in this example would result in an additional 2 millions euros for the community – or 1.000 Euros per home per year.

Conversely, if the community was not maintained or managed properly, the collective cost of poor management would equate to the same 2 millions of euros. Ironically, some communities consciously choose to reduce the quality of their services, diminish the appearance of their buildings or grounds, or select a cheaper management company in the belief that they will save a few dollars.

Unfortunately, to get small savings in management fees or service charges, in this example, will result in big losses.

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