When starting out, most condo owners tend to opt for the self-management route. If you’re a one-man show, this means dealing with new tenants, maintenance issues, complaints and several admit tasks every day. All this can take a toll on your health and your sanity. In fact, you’ll be forgiven for feeling like there aren’t enough hours in the day, and we’d be lying if we said things get better because they usually don’t.
So unless you’re committed to doing things “the old-fashioned way” there’s no reason to feel constantly burnt out from managing your condo.
But, if you’re still feeling undecided about which option to take, we’re here to help shed perspective. Below is a comprehensive comparison between the two systems, including the pros and cons of each so that you can make an informed decision.
Condo Management Companies
A condo management company is an organization that takes care of all the tasks related to managing a condominium building. Such companies consist of a team of professionals that specialize in different fields, from marketing to accounting, tax management, and HR. Most of the reliable and experienced condo management companies have a stellar track record. They’re known for helping landlords to increase turnover and maintain long-term tenant rentals.
Here are some pros and cons of working with a condo management company.
– Access to infrastructure:
Working with a condo management company means you won’t have to spend time and resources setting up infrastructure. Most companies spend years investing in the development of infrastructure that’s designed to streamline and simplify the management process.
You’ll have all the necessary documents at your disposal including lease agreements, notices of entry, applications etc. Some companies even use property management software to streamline their operations and improve their record-keeping capability.
Also, their documents are based on sound legal practices and comprehensive knowledge of the landlord legislation in your state. So you’ll have protection legally, financially and administratively.
– Access to vendors and Contractors:
It’s no secret that renters can take a toll on your condo units because it’s not their property after all. This means you must deal with a fair amount of repairs and a few refurbishments here and there. You also must consider seasonal maintenance that’s aimed at keeping your main systems going, like your electrical, HVAC and plumbing.
All these tasks need experienced contractors to make sure that your property is in tip-top shape. The good news is that condo management companies keep an updated database of reliable contractors and vendors that you can call on whenever you need work done in your condo.
– Less work and stress:
A self-managed condo requires a lot of work and it doesn’t leave much time for you to enjoy life or look into other opportunities. A condo management company will save you time and energy by providing you with all the resources you need to manage your condo. They’ll take care of all the time-intensive tasks that used to eat away at your day, leaving you to enjoy life and research other business prospects that you may want to invest in.
You’ll no longer have to deal with temperamental tenants, late rent payments, vacancies or maintenance requests.
– Less Control:
A lot of condo owners have watched in vain as condo management companies ran their businesses to the ground with shoddy practices. This isn’t always the case of course, as most condo management companies are up to standard. But, relinquishing control of your condo does open you up to the possibility of mismanagement.
– Possible exposure to fraud:
Although rare, there are some condo management companies that run fraudulent operations. Some will go as far as to falsify records and say that some of your units are vacant when they are in fact occupied, only to pocket the rent for themselves.
That’s why it’s always advisable to do a thorough background check on a condo management company before you consider working with them. Check online reviews to see what current and past customers say about the company’s service and don’t be shy to ask for references as well.
– It can be expensive:
Condo management companies don’t come cheap and for good reason. They offer a comprehensive service that involves an investment of their time and resources to running your business. Even so, this extra expense will affect your bottom line.
As the name implies, the self-management approach means running your condo by yourself using systems and infrastructure that you’ve developed. You can even use condo management software to simplify the process and digitize your tasks for faster productivity.
Here are some of the pros and cons that come with the self-managed solution.
– It’s cheaper:
Managing your own condo will save you the expense of paying someone else to do it for you. You see, most condo management companies charge at least 10% of the rent collected from new tenants each month and that can add up to a lot of money in the long run.
– Increase your experience:
It’s often recommended for property owners to start by managing their own condo at first so they can learn the ins and outs of the business before they relinquish control to someone else.
That way, even if you choose to outsource your condo management down the line, you’ll know enough about the process to avoid being bamboozled.
– You care more:
Very few condo management companies will take care of your condo and your tenants as well as the owner. It’s true that condo owners tend to put in more effort into each task because they know that they have much to lose if they tick off even one tenant.
– It’s a lot of work:
A self-managed operation means dealing with an endless list of tasks on a daily basis, including:
- Managing tenant relations
- Looking for vendors and contractors
- Interviewing prospective tenants to fill vacancies
- Doing your taxes
- Collecting rent
- Handling evictions
- Conducting inspections
This looks like a lot of work because it is and as a result, you’ll hardly have time left to do anything else.
You also have to be available and on call 24/7 just in case your tenants need something. This leaves very little time for you to take a vacation and since you‘ll devote most of your weekends to your work, you can forget about having a social life.
– Less effective:
Unless you hire an assistant, the strain of doing everything by yourself can take a significant toll on your mental and physical health. Once this happens you’ll be less effective at performing important tasks that are needed to maintain the property. This can negatively affect tenant relations as your renters will feel you’re not showing up for them like you used to.
To Wrap Up
If you opt for a condo management company, you must put them through a vetting process to make sure they have
a proven track record. It’s best to opt for an experienced condo manager that knows what they’re doing and has a strong infrastructural foundation.
Also, make sure you hire a company that specializes in condo rentals specifically so you know they have the experience to make a success of your business.
It’s important to add here that it doesn’t have to be either/or situation. You can use both solutions to your advantage by performing some tasks yourself and outsourcing the rest. Plus, nowadays landlords have access to great property management software like Condo Control Central, which allows you to automate and digitize most of your operations.