5 Benefits of Condo Property Management: How to Improve Your ROI

When you hire a property management company to manage your condo, it’s a given that they’ll take on the core responsibilities of overseeing your property. But how are they also leveraging their expertise to attract and retain better residents? If you find the right property manager, you’ll be able to increase your ROI, as well as reduce the amount of stress and time you have to dedicate to running your rental property. 

What is Condo Property Management?

Condo property management refers to the professional oversight and administration of condominium units and their common areas. These professionals keep the property well-maintained, keep tenants satisfied, and ensure the association's rules and regulations are enforced.

By delegating the day-to-day responsibilities of condo ownership to a condo management company, owners can enjoy peace of mind, maximize their return on investment, and focus on other aspects of their lives or investment portfolios.

What is a Condo Manager?

A condo manager, also known as a condominium property manager, is a professional responsible for overseeing the day-to-day operations of a condominium complex. Their role involves handling administrative tasks, coordinating maintenance and repairs, managing finances, and promoting compliance with condominium association rules and regulations.

Condo managers act as a liaison between condo owners, tenants, and the homeowners' association, striving to maintain the property's value and enhance residents' quality of life. 

Is Hiring a Condo Property Management Company Worth the Investment?

Property managers offer significant value due to their expert ability to rent and maintain your condo. They also will have a network of other property managers, realtors and sub-contractors to assist with finding tenants and making sure service requests are handled quickly and professionally.  Let’s explore the specific benefits of working with a property manager in more detail.

What is Return on Investment (ROI) and How is it Calculated?

As you might have guessed, return on investment is a measurement of performance used to measure the profitability of an investment. ROI is used to compare the return on your investment relative to your investment’s cost. To calculate your condo’s ROI, divide the profit your condo generates by the cost associated with it.

So, for example, if your condo generates $24,000 from rent payments per year and the overall cost of running the property is $20,000 per year, then your profit is $4,000. If you divide $4,000 by $20,000, then you get your ROI which is 20%. In general, anything over 15% is considered a good return on investment for a property.

5 Ways Condo Property Management Can Improve Your ROI

Investing in condo property management can lead to significant returns on investment. Let’s explore five key ways that partnering with a reputable property management company can enhance the profitability of your condominium investments.

1. They Effectively Market Your Properties

It goes without saying that if your condo sits empty, it doesn’t make you money. A reputable condo management company can optimize your property’s online presence by creating well-written and well-placed listings that highlight the features of your property that set it apart.

This kind of intentional marketing can attract prospective residents more effectively than you can on your own. They’ll know exactly where to advertise, how to boost the searchability of your property, and where your ideal clients will be looking for properties. If there are particularly effective internet listing services for your area, they’ll have that information readily available.

These sites integrate listings across multiple sites, such as HotPads or Trulia, to create a single, searchable database of rental properties. Or, if renters in your area prefer to search individual rental websites, they’ll know that they should be listing your condo there, instead.

Depending on the size of the company, they may also have a network of other real estate professionals who can work with prospective tenants. With more interest comes more applicants and, eventually, renters.

2. They Know the Value of Your Condo

One of the reasons condo owners might lose money on their investment is because they undervalue their property when it comes time to put it on the market. Reliable condo management companies specialize in doing the market research necessary to set a fair, but profit-earning rental price. On the flip side, a condo management company won’t overprice your condo, which can create long vacancy patterns. 

3. They Carefully Screen Tenants

After your condo management company’s expert marketing creates a pool of applications for your condo, it’s important that the “right” residents get signed on. Many property owners find that working with a condo management company takes the guesswork out of the process by integrating comprehensive tenant screening.

Condo managers know what red flags to look for and how to select responsible residents. By completing credit screenings and background checks on your applicants, they’ll be able to determine which of your prospective residents will be the best choice. Responsible residents will pay their rent on time, will take care of your property, and ultimately, keep your rental profitable. 

4. They Keep Residents Renting

Part of a condo manager’s job is to build a good rapport with residents. Let’s face it, very few property owners have the time to do this. But, a large portion of your condo manager’s job is to keep your residents happy. This will keep your condo rented out and generating revenue. So, they’ll be sure to keep channels of communication open. If your residents feel well taken care of, they’re more likely to stick around.

According to Buildium’s Rental Owner’s Report, 31% of rental owners reported that the pandemic had a negative impact on their residents’ ability to pay rent, with 13% of owners having worked out a payment plan with at least one resident.

Unsurprisingly, the number of rental owners who wanted an expert’s help jumped from 78% in 2019 to 90% in 2020. This is due to the fact that property managers are able to build rapport with residents and work closely with them to meet their needs. Tenant retention keeps your property occupied and making money, increasing your overall ROI. 

5. They Work With Condominium Boards

Another benefit of working with a condo manager is that they can work directly with your condominium building’s board. Condominium boards set the building’s bylaws, hire maintenance staff, and maintain common areas.

A condominium management company can act as your intermediary to make sure that your residents are following all of the building’s policies. They can also keep your residents happy by working with the condominium board to make sure all maintenance requests are handled quickly. 

What Should You Look for in a Condo Management Company?

While many property managers can add significant value, it’s important that you hire the right one. Here are a few things to look for in your future condo management company. 

Experience

It goes without saying but, we’re going to say it anyway: experience matters. An experienced company will be better at staying up-to-date on industry regulations and on the newest methods of marketing a property.

When making a decision about what management company you want to hire, look for a well-established company with years of experience. You may also find that more experienced companies are more likely to be associated with organizations such as the National Association of Residential Property Managers (NARPM) or National Association of Realtors. These professional associations offer their members continuing education and coaching that benefits you, the property owner.

Location

Working with a condo manager who’s local to your property will ensure that they’re familiar with the local markets and how to attract renters in the area. It also increases the likelihood that they’ve developed a network of vendors in the area who can jump in at a moment’s notice to help you should you want to upgrade your condo or if your residents need a repair quickly. 

Investor mindset

Look for a condo management company that has a profit-driven mindset. They should be as driven as you are to increase the profitability of your property and maybe, even eventually grow your rental business. A company with this mindset will have experienced managers on staff who have strategies in place to help you maximize the ROI of your property.

They’ll also be up-to-date on current market trends. Additionally, they’ll be diligent about monthly reporting, keeping you fully abreast of your income and expenses. 

In fact, investor-minded managers will likely use property management software that will ultimately increase your profits but automating the day-to-day tasks related to running a property and creating a method for efficient, open communication between the two of you. Good managers will help you grow your business, making them well worth their fee. 

Strong Communication Skills

Your condo manager will be representing you to your condominium board. They’ll be the first point of contact with new and existing tenants. Therefore, it’s vital that they’re excellent communicators. Pay attention to the way they communicate with you when you’re interviewing them. Look for a property manager who is responsive, easy to get a hold of, and straightforward.

Finding the Perfect Condo Property Management Company

At the end of the day, it's most important to find a condo property management company that fits well with your lifestyle. Look for a company with a track record of success in managing condominium properties similar to yours, and prioritize clear communication and transparency throughout the partnership. By choosing the right management company, condo owners can optimize their ROI and enjoy peace of mind knowing their investment is in capable hands.

Looking to hire a condo manager? Use our free search tool to find the perfect partner for your rental property.