Board of directors discussing in-house HOA management options for a large condominium community

Why Are Larger HOAs Hiring In-House Property Managers Instead of Companies?

ByRussell Munz
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Every homeowner association (HOA) or condominium board is ultimately responsible for running its community. Many boards hire HOA management companies to handle day-to-day operations like bookkeeping, staffing, and property oversight. For many communities this is the preferred management method.

However, larger scale communities, which require onsite staff, may not benefit as much from having a local “full service” HOA management company. These larger communities typically include master planned developments and condominiums with a significant number of assets and common area to maintain.

Why Management Companies Are Popular… and Problematic

HOA management companies offer a seemingly simple solution:

  • Bookkeeping and payroll support
  • A community association manager (CAM)
  • Administrative staff
  • Vendor and maintenance oversight

For busy boards, this can feel like a turnkey solution. But the reality often falls short:

  • Boards may have little control over which manager is assigned
  • Company salaries may be lower than the association could pay directly, causing turnover
  • Inefficient internal processes can delay payments and responses
  • Managers may experience burnout balancing company and community demands
  • Hidden fees—like payroll administration costs, typically normally  15–25% of wages, can make “low” management fees misleading

Bringing Management In-House: A Smart Move

Transitioning away from an HOA management company may seem daunting, but it can be both cost-effective and efficient:

  1. Hire an Experienced CAM Directly – Find a licensed community association manager with onsite experience.
  2. Lead Recruitment – The board or a recruiter fills positions. One-time recruitment fees beat recurring company payroll charges.
  3. Build Your Team – A CAM can recruit assistants, administrative staff, and maintenance crews.
  4. Outsource HOA Accounting – Partner with providers like Community Financials for bookkeeping, reporting, and payroll – without inflated overhead.

A Real-Life Example of Hidden Costs: This HOA saved over $100k in annual management fees

Community Financials recently worked with a large condominium development of over 200 units bringing their management function in-house. The client’s HOA financial statements listed $40,000 as “Payroll Expense.” But what wasn’t listed were the fees for the payroll administration that the management company was charging the association. On further review, we found 30%, nearly $9000, was administrative fees to the management company. In addition to this, the association was also paying $2,500 per month as a base management cost. 

The board believed their monthly fee was only $2,500 per month, but the true cost was closer to $12,000 per month. By hiring staff directly and outsourcing their HOA accounting, they were able to reinvest over $100,000 per year, and:

  • Hired a more experienced CAM with a better salary
  • Paid maintenance staff higher wages to reduce turnover
  • Invested in new tools and equipment
  • Redirected the rest of the savings into reserves

Consider a Hybrid Approach

Not ready for full in-house management? Boards can contract some services from an HOA management company while outsourcing accounting. In these scenarios, the management company provides the staffing and management resources to manage the property, while an HOA accounting firm like Community Financials provides the accounting and bookkeeping work. 

This could be a viable solution when the management staff are doing well, but the board is not happy with the accounting and record keeping work done by the HOA management company. 

While the savings may not be as significant due to the payroll administration fees,  the board would have a turnkey solution to ensure the community has the proper staff in place, while also getting the financial oversight they need.

Why Direct Hire + Separate HOA Accounting Works

Boards that make this switch often see:

  • Clearer financial reporting
  • Lower overall costs
  • More control over staffing
  • Reduced turnover from competitive pay
  • Faster, more reliable service for residents

At Community Financials, we’ve guided many associations through in-house and hybrid models. Our online HOA management tools give real-time access to financial data, without extra licensing fees.

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