Property Management Companies must Remain Competitive

June 2017

As the Toronto Condo Community continues to grow, there is also a growing need for  property management services.  New property management companies have risen to fill this void.

With so many companies to choose from, property management companies must work harder to remain competitive.  Condo corporations need to work harder at understanding what services are provided by property management companies, more clearly identify what it is they want out of a property management company and how much they are prepared to pay.

Condo corporations change their property management company for many reasons.  At times price is the determining factor; a smaller company charging less may be appealing even when it means reduced service.  A new condo board may be unhappy about something and blame the property management company.  To them a new property management company may be the solution.

Newer companies may offer lower prices to get into the market.  They may operate out of a home office until growth requires more space.  A smaller company may provide more personal attention.  Working with a smaller company can be of financial benefit to a condo corporation so long as they receive the services and support they require.

There are limits to how low property management prices can drop while continuing to make a profit.  For smaller condo corporations, this minimum may be too high.  Managing a condo corporation well requires a decent fee so that necessary work can be done.  For these condo corporations, employing a property management firm for fewer hours and requiring fewer services may be a reasonable compromise.

Property management firms are expected to handle everything that comes at them.  Suite owners often feel that management could be doing more and providing greater value.  The only way to do this without charging more is to automate more of the work.

Property management firms seeking to do more without charging more have found ways to integrate technology with managing properties.  For some this means Internet-based condo management software that provides a secure site where everyone can see what is happening at all times.  Effectively used, this allows property managers to do more, provide better interaction with residents and boards, and save time that can be used to provide greater value.

Another approach is to post information online.  Eliminate printing and delivery of print documents to residents.  This has the triple benefit of reducing print and mailing costs, saving time, and improving service by allowing residents to obtain whatever information they require at any time.

None of this eliminates the need for a personal presence.  Condo residents will always have questions or require information not obtainable online.  Direct communication is superior when addressing some questions or situations.

Condo boards retain control of how much automation is appropriate for their corporation, what services are desired and how much they are prepared to pay for professional property management services.

Remaining customer focused can be a challenge.  Condominium managers are employed by the condo board but have an obligation to all condo owners and residents.  Condo boards and residents  may have broader expectations of  condominium managers than what  was contracted.  Boards tend to meet at night and a condominium manager may be expected to attend.  A full-time condominium manager may be able to attend these meetings and take some time off during daytime hours.  A condominium manager servicing multiple buildings may find it more difficult to attend these meetings.  It is unreasonable to expect them to return home at 11 pm on a regular basis and still be available at 9 am the next morning.

Dealing with these challenges requires property management companies to make internal decisions.  Some may be more selective about which condo corporations they agree to manage.  Others may focus on larger condo corporations with larger budgets which can afford a full-time condominium manager and, possibly, an assistant.  Other property management firms may focus on servicing a large number of smaller condo corporations or providing only specific services.  A property management firm that provides accounting services or snow removal may prove to be more economical than seeking these services elsewhere.

One way for condo boards to navigate the diversity of property management companies is to undertake a proper bid process.  Create a Request for Proposal (RFP) with specifications of what is required.  Provide the RFP to at least three property management companies.  When evaluating responses, be sure they include additional costs for services that may be desired during the term of the contract.  Consider how much personal contact and interaction occurs during the bid process.  Companies that lack personal interaction during the bid process are unlikely to change once a contract has been signed.