Specially designed for community association asset management, SmartProperty helps communities right-size their reserve fund contributions by turning a traditional static reserve study into a living document. This ‘Living Reserve Study®’ combines all of the tools you need to develop and implement a strategic plan of CapEx management for your community association.
SmartProperty’s tools are interconnected, meaning that you can update your funding plan in real-time as your inventory changes, or earmark reserve funds within your capital improvement project.
We sat down with the SmartProperty Founder, Damian J. Esparza, to chat more about his company’s vision and how their technology helps community associations implement a strategic reserve plan to keep community finances healthy in the face of rising inflationary costs.
SmartProperty is reshaping and redefining the reserve study offering, and we don’t really see ourselves having any true competitors (yet). What we mean by that is there really aren’t any other companies in the space currently that are offering a Living Reserve Study. Some may offer “what-if” scenario capabilities online, but they are still solving for the ‘one and done’ reserve study designed to set reserve contributions in the budget. Then it gets put on a shelf, becoming nothing more than an expensive paperweight.
The Living Reserve Study® is about better managing the lifecycle of the components themselves. It’s more than just developing a dynamic funding plan, it’s about creating a living history of your assets and repair records that gives you more insight into what your future capital needs will be.
Our core value proposition rests in the belief that your data is as much of an asset as your components themselves, and thus should be maintained and cared for accordingly. That is the key differentiator in how we think vs. other reserve study providers.
Again, our core belief in data being a primary asset is a huge part of our philosophy. SmartProperty strives to create more relevance to deliver more value to the end-user experience.
The promise of a reserve study is to prepare the community for future expenses so the homeowners are not stuck carrying the bag when components fail. Right now, we are living with the consequences of a “free rent” mindset where millions of owners have not paid their fair share for use of common area components, and current owners are being hit with more hidden surprises and special assessments than ever before. I have sat in countless board meetings and seen the promise of a reserve study not being fulfilled. I’ve seen the frustration that comes from having a reserve study in place, and still getting hit with a special assessment.
That made me question what was missing. Ultimately, a reserve study follows the lifecycle of a common area asset – from installation, to maintenance to replacement. It’s a lifecycle – an asset management lifecycle.
That made me rethink what reserve study success looks like, and that to get it right it would require greater knowledge and understanding of the lifecycle of an asset, from beginning to end, and all the stages in between. Success would require more than a static document or a one-time engineering study. Our industry and the associations we help deserve better. At SmartProperty, we are building modern tools that leverage the asset lifecycle data, empowering boards to make better decisions.
Our company culture and values are all about being fun, fast, and flexible. We are big believers in “strong opinions, loosely held.” We rely on our failures just as much as our successes to build and grow as a company. We listen to our customers, and what we do is really driven by customer input.
We are operating in an environment where things are constantly changing. We always look to go where the puck is going, not where the puck is now. For example, while industry experts all warned against the impact of extreme deferred maintenance, nobody foresaw a building could simply collapse, including me. But what we did see was an increased culture of deferral, where boards have abdicated making the tough decisions over the course of decades. In my opinion, the severe deferred maintenance that can lead to catastrophic events is a symptom of the real problem. The real problem is the culture of deferral itself. Why? Because boards lack the tools and information to help them make better decisions–whether it is justifying fee increases, analyzing financing options, or approving special assessments–so they end up doing nothing.
With a company culture rooted in being flexible enough to adapt to a changing landscape, we saw where the puck was headed. We realized that boards needed a reserve study that would deliver better information on the lifecycle of the data to ultimately empower them to make these tough decisions. And that was the key driver for creating The Living Reserve Study®. Being flexible enough to adapt to rapid changes in the industry is a testament to our overall success.
From my 21 years in this business, one thing I’ve always known is that this is a people business. Our people are our strongest assets. As much as we are a technology company, our technology is developed and delivered by our people. We are a team, and we work hard to find balance in that.
At the end of the day, we need to make sure we keep the end user top of mind, and treat them as we would want to be treated. We know community management can be challenging, and feel it is important to always come from a place of gratitude and appreciation for those that are on this journey with us.
The industry is moving as fast as I’ve ever seen, and while there are a number of factors we can point to, I believe in part it’s a result of more institutional capital entering the market. This is bringing in new levels of talent and knowledge into the industry, which I believe can be a very good thing – where all boats can rise.
As a result of these changes, we’re seeing a shift to a higher degree of sophistication in how management companies operate their business. Management companies are seeing an opportunity to increase their perceived value as asset managers, as opposed to simple custodians.
This is leading to an increase in specialization and a shift away from the manager being the jack of all trades. Management companies making this shift are learning that they can provide real value, increase profitability, and differentiate themselves from the competition – which I believe will continue to define the industry going forward.
I see more growth in the future for this industry. I believe that management companies are learning to increase their productivity while doing more with the same. Management executives are paying more attention now to business intelligence and understanding that they can turn their data into insights that will lead to more revenue.
I believe we will see more focus on better understanding the customer journey with more consistency and cohesiveness in the overall experience, much more like what you see in the hospitality industry. What Innovia is doing to help level the playing field for small and mid-sized management companies is one example of how this industry is rising to the challenge. I believe the level of service will only continue to improve as we see more institutional capital, sophistication, technology and talent entering the industry.
Thank you for the opportunity to share SmartProperty’s vision. I believe that this industry is moving toward great things, and I am honored that we are able to play a small part as an Innovia partner in helping to move the industry toward that future.