Just how important is property management when it comes to condos? What are some of the ways a good management company can make a big difference?
The need for great property management is often overlooked by real estate investors, and even condo and homeowners associations themselves. So just how bad can it get? How can a good condo management firm help?
The Devastating Expense of Poor Condo Management
There are obviously two parts to managing condos. There is the property management of the community on behalf of the association. Then there is property management for individual unit owners who acquire condos as an investment, or who do not live in them full time. Both types of management can have a massive impact on individual unit performance, and the solvency of the entire community.
It all really trickles down to values.
Poorly managed condos bring down both the value of individual units, and the entire property.
This is seriously bad news for all owners. And it can happen a lot faster than you think. Poor unit management can degrade unit value and income potential. In a condo building neglected maintenance, and bad tenants and owners can absolutely roll over and afflict neighboring units too.
Then there is the association and community property. Poorly maintained property and records can quickly limit which lenders will make loans in the development, the appeal of buying in the complex, and then the values.
When the housing market dove in the early 2000s many associations literally went broke, or at least pulled back so far on services and maintenance that units couldn’t be bought and sold, even if people would take the risk on buying them. The result is already that even though we are now in great times, many are still gripped with fear of buying condos and other properties in associations.
Nine Ways a Good Property Management Company Can Help
- Property maintenance and repairs
- Delivering discounts on vendor services
- Weight in getting vendors to perform better
- Enforcement of condo association rules
- Minimizing the impact of rogue board members
- Dealing with tenants, and tenant-landlord compliance
- Optimizing budgets
- Professional bookkeeping and record keeping to optimize values
- Facilitating the exit of bad apples, while encouraging good owners and tenants to come in
Management makes all the difference when it comes to condos. It’s the difference between bankruptcy and worse, versus very profitable and enjoyable investments. Unfortunately, in spite of the best intentions some board members and unit owners don’t have the broad and deep industry expertise to optimize management in all aspects. That’s where a great property management company can make all the difference.