Per the Community Association Institute (CAI - the industry trade group) - at the end of 2012, there were 323,600 community associations, 25.9 million residential housing units and 63.4 million residents living in a community association (condo, HOA, co-op)
The community association industry has grown enormously since 1970 when there were only 10,000 associations in the United States. Community Associations come in all different price ranges, sizes and with different amenities. Each of them also have their own personality.
With so many communities and competition for re-sales, association board members need to have a vision and goal-planning skills to maximize the brand equity in their community. Following through on this vision may help the community overcome any adverse market conditions.
There are many ways a Condo or HOA community can increase real estate values for the owners. A community can and should improve its desirability and market value. Here are some ideas to help your property values that don’t even cost anything (or cost a minimal amount).
The First Step in improving property values in your community is to start with a community survey.
Surveys can provide a lot of valuable information. A good plan is to survey your community every six months or so. This will provide enough information to determine if you’re meeting the resident’s needs and if things are getting better or worse. Include both owners and renters on the survey. It will help to see how the community is perceived by different groups of people.
The survey results can be used for long-range planning, solving problems, and making decisions. There will always be negative responses, but the surveys are useful because they help identify problem areas.
Questions should emphasize long-range objectives.
Questions should be short and include a space for comments.
To keep the focus, one person should draft the questions and then ask for feedback from the Board. Consider a ten day deadline to return the survey. Any longer and it can become lost or forgotten.
To improve the response rate, try to generate interest in the survey via the website, newsletter, meetings, etc. Let everyone know the results will be made public so they can respond and look forward to the results.
Sample survey questions to include are:
- What was the major factor in your decision to live here?
- What do you like most about living here?
- What do you like least about living here?
- What is one thing you would change about the community?
- What is your opinion on the enforcement of the rules & regulations?
- How would you rate building and common area maintenance?
The final step in the process is to evaluate the successes and areas that could be improved.
The Typical Way of Thinking of ways to improve market value in your Condominium community is:
- Obtain FHA approval
- Perform a Reserve Study
- Have a healthy financial statement
- Have an adequate reserve fund
- Keep the property maintained
There are, however, other ways to improve market value.
While the typical way of thinking is good and very important - it is just a start. We believe that “building community” is essential to really improving your community and its market value.
Marketing your community is also very important. If the role of the Association (Board members) is to maintain common elements and improve property values, then marketing the community is just another step.
Reasons to Market your Community
- Compete against new construction
- Stand out from the crowd
- Build its reputation (Might also help overcome some shortcomings.)
There are thousands of condominium associations across the country and there is a lot of competition. None of the other associations are marketing their community. Why don’t you?
The goal is obvious – make the community a neighborhood that becomes a more desirable place to live, which in turn will increase property values.
Here are some tips on how to stand out from the crowd, enhance the livability, increase market values, and generate many offers. It’s not jut “location, location, location” anymore.
Marketing TO your Community
Building community should be the heart of your marketing. This involves promoting the community to the current owners/residents. The objective is to increase the desirability to live in the community. Marketing TO your community includes the following:
- Communicating often to the owners/tenants. This should include open meetings, a community website, newsletters and more.
- When making and enforcing rules, be fair, consistent and flexible. The goal is to help people live together peacefully.
- Handle the Architectural control process with some flexibility. Balance the governing documents (and rules) with room for personal preferences.
- Have some flexibility in rules governing For Sale signs and Open House signs.
- Establish a tradition of community activities and try to get everyone involved
Consider asking community vendors or local businesses to sponsor or donate to the community social events.
- Consider starting a Habitat for Humanity Build Team representing the community, or something similar
- Enhance the curb appeal of the community. This includes the entranceway, landscaping, buildings, elevators, lobby and other common areas. Keep the paint fresh on the exterior doors, consider replacing the entrance sign, and maybe update the window treatments in the lobby. This can make a huge difference to improve the marketability of the community.
- Start or expand a Welcome Committee. Greet new residents with a plant and community information such as active social groups, clubhouse info, newsletter and more.
- Rules: Be fair and apply all rules consistently. Do not show favoritism. Look at alternatives to some common issues that will satisfy both parties. Common rule issues that are in the news include: parking, pets, rentals, flags, and architectural control. Be reasonable.
Foreign Languages: Just about every community includes residents whose native language is other than English. The community should make an effort to include these residents in gatherings and communicate with them as well. This might mean having the newsletters printed in other languages and other accommodations.
Elderly residents: Many elderly residents are capable of living independently and paying dues on time. However, there may come a time when they need help. There are several signs that can provide clues. Being a community, the neighbors, board and committees might consider watching for these signs and providing help when needed.
Seek feedback before a major action that might upset some residents. Provide information and ask them for input. This may include repaving, changing signs, painting, changes to rules, etc. Get the confidence of the owners by building trust. You may have the best reasons, but without trust you will lack support.
The best way to build trust is to communicate with owners regularly.
Community Websites & Newsletters can save money and facilitate communication.
Good communication and active participation are two of the biggest challenges to building a strong community. A community website can be the solution as it increases communication, and improves participation.
A website is the best place to advertise your community. It should be updated regularly to keep it fresh and encourage return visits.
A community website should include a public area, which can be used for marketing the community. This area should include information about the community, amenities, location, photos, activities and more. It can also have an area to post homes for sale. Most of the website content should be for only the owners with restricted access.
In addition to the usual features of a community website, you might also want to include the following:
- Blast emails for mass communication to entire community. Perfect for meeting, voting, and social reminders, lost/found and more
- Link to other websites in the area such as town hall, scouts, fundraisers, etc
- Association can sell ads on their website. They can also use the website to partner with area businesses that may provide discounts for their residents.
- Classified ads by residents
- Babysitters, Pet sitters, Carpool information
- Pictures of social events
- Volunteer spotlight
- Publish some Letters to the Board - ask permission first. This gives residents a voice and makes them feel you’re interested in their opinion. Provide a mix of viewpoints
- Resident Profiles with an interesting background, job, adoption, etc.
- Local news that affects residents - zoning issues, street closures
- Personnel changes - new employees, promotions
- Resident accomplishments “Get to Know your Neighbors” section
- Social event calendar
- Status of ongoing projects, events, safety issues, concerns
Communicating often with the community brings everyone together. The owners aren’t kept in the dark and wondering what the board is planning. It helps alleviate frustration and results in a happier community. It may also reduce complaints posted to online forums.
Give owners a reason to volunteer. Develop a mission statement based on feedback from the homeowners. Create a vision for your community. Do you want to create a desirable place to live? A family friendly neighborhood? Create a Tag Line/Slogan that can be included in every piece of communication, along with your logo.
Provide training and education for volunteers. This will reduce their apprehension. Consider joining the industry trade group, CAI (Community Association Institute), which has educational materials and classes for volunteers and board members.
note: There usually isn’t a huge response when you ask for volunteers at the annual meeting. The best way to get volunteers is to ask them personally, neighbor to neighbor.
Evaluate your competition: Survey and evaluate your community and local area. Where does your community stand with respect to amenities, fees, age, and desirability of the neighborhood? You are then be able to evaluate your strengths and weaknesses. In marketing, you always want to highlight your best features while at the same time, work toward improving your areas of weakness.
Promoting your community to others (outside your community) can also be key to improving the property values and desirability. Here are a few ideas:
Make sure that the common areas of the community are well kept. This is one of the most important aspects of marketing.
Does your community have a logo? A logo helps people identify with the community. If you don’t have one, try to find a logo that contains the positive aspects of your community.
What are the distinctive characteristics that help define your community? It could be unique architectural design, sound financial practices with a healthy reserve fund, waterfront, beautiful landscaping, location or other qualities. Once you determine your distinctive characteristics (what sets your community apart), you should market it as a strength.
Consider creating a sales brochure to foster a positive image of the community. Some things to include could be an overview such as size, number of residents, long time residents, clubs, community amenities, social activities, entrances and lots of pictures. Include your logo and tag line on everything. The sales brochures can be distributed to local real estate offices and also be made available online.
Social Media Policy
The Association should consider having a social media policy whereby they can try to control any bad publicity and possible legal issues. Social media can negatively affect the association’s image with postings on Facebook, Twitter, chat rooms, etc. The association needs to be aware of potential bad publicity. They may want to consider setting up Google alerts or subscribe to a service like Topsy to see what is being said about them. Once aware, they can address the situation. Some unhappy homeowners have setup “fake” websites in an Association’s name. The only purpose of these “fake” websites is to blast the association and usually tell buyers to stay away. Being alerted to this type of site early on, will allow you to take action before too much damage is done. The association should also make it known that their website is the “official website” and official communication vehicle for the community.
Board members should be aware that emails can be considered as evidence in court. They should have an official email policy which should address appropriate language, tones, racism, drugs, guns, discrimination, and more.
The Association should consider “beefing up” their website. It’s easier to manage the content and make the community aware of issues early on, to avoid negative publicity. This could also help increase unity, with one site where it all comes together.
Community and Board Decisions
Many communities don’t consider the ramifications of their decisions on their property values. Condominium Association policies can help or hurt property values. They can also drive away buyers. There are many, many Condo and HOA horror stories floating around on the internet these days. If your community made the local news or was part of a story that went viral on the internet, then chances are you didn’t handle the issue in the best way you could. Complaints about condos are always in the news.
Sample association policies are:
- Approving a large special assessment
- Deferred maintenance. Buildings and amenities are deteriorating. Associations must make a good impression. Entrance signs should be painted and surrounded by nice landscaping.
- Condominium Association may not have FHA approval. Some condos have never applied for it. Some had it at one point, but let it expire. Some just didn’t qualify for it due to an under-funded reserve fund or other reasons. Not having FHA approval reduces the pool of potential buyers. Many buyers use FHA which allows them to make a low down payment on their purchase.
Obtain a Reserve Study
Obtain a Reserve Study and actually follow the funding requirements. This policy may reduce the risk of a special assessment and buyers will be more confident about buying. Resale values are notably higher in buildings whose reserves are adequately funded and there are no special assessments. Many Lenders deny loans to those buying in an association with an under-funded reserve. The Financial Health of an association is very important to potential buyers and their lenders.
Lobby: Is it looking old and drab? Does the lobby need to be refurbished?
Elevator: See Lobby. In addition, does the association have a regular maintenance contract for the elevator? When the elevator breaks down, is the contractor available to make repairs within a reasonable time? There are many complaints about elevators always breaking and not being fixed for a day or two, or longer if it happens on a weekend. This is not only inconvenient for the owners, but bad news travels fast.
Do the grounds, lobby, elevators, hallways, decks, etc make a good first impression? Does the condition show that its being taken care of regularly? The common areas should make a potential buyer be inclined to actually enter the unit that is for sale. It will also make the owners/residents feel good about their investment.
Rental Policy. Is it reasonable? Consistently applied? Flexible when needed?
Pet policy: See Rental policy.
Communication is very important. Maybe the most important policy. Boards don’t see the result from failure to communicate until it is too late. It is easier to communicate bad news than it is to calm down owners after they been misinformed by the rumor mill and lost trust. Announcing bad news immediately gives you the advantage of getting the facts out before the rumors and misinformation can circulate.
If your association approves a new rule or policy change, be proactive. Look for options to mitigate the effect on the owner. For example, with a large special assessment, find ways to assist owners. This could mean an installment plan, talking to some local banks on their behalf, have a loan officer at a meeting, etc.
The next step in the Marketing Plan is to become acquainted with the local Realtors. Send them your community brochure or a simple overview. It will help improve their knowledge about the association and also assist with sales.
Continue to reach out and build relationships with local realtors. Consider inviting them to a board meeting to provide advice on how best to improve your community image. Ask them to do an analysis of similar condos and amenities. Ask them to share information about short sales. Have them explain how it’s better than foreclosure for both the homeowners and the community. A bank approved short sale will sell for more money than a foreclosure, which will help with appraisals and resale values.
Most real estate agents will use whatever information they can find in order to promote their listings. By providing them with positive information about your community association, on a timely basis, you will help raise awareness, confidence and ultimately, property values.
If you are able to identify certain real estate agents who tend to sell more homes in your community, invite them to a social event. Consider having a community open house event for all the homes that are currently on the market.
Maybe the real estate agents will agree to offer seminars to homeowners which teach them ways to improve the sale-ability of their home – remodeling bathrooms, fresh paint, staging, etc.
Important: Ensure that both the association and its management company are VERY helpful during a sale process. The realtor, lender, appraiser and potential buyer need vast amounts of documents and information from the association. Consider automating and possibly streamlining the process to alleviate delays and missing documents.
Working with the realtors can lead to shorter days on the market, higher sales prices and a new resident base that is more informed and happier.
Sponsor Local Events: Consider sponsoring local community groups. This may include: school fundraisers, local festivals, 5K fundraiser, boy/girl scouts, etc.
Partnership with Charities: The local United Way, Humane Society, etc. provide excellent opportunities for community-based philanthropy. Even a community-based Habitat for Humanity team will help the charity plus also bring residents in your community together.
Press Releases: Local papers and websites are always looking for community stories. Consider sending “free” press releases to the local media. These press releases could include: sponsorship of local events, something interesting about a community resident, a Habitat for Humanity build team and more. The goal is to keep the community in a positive light, and the news on a regular basis.
Consider creating a marketing committee. The long term results of improving property values and sales can far exceed any marketing expense. Creating a marketing plan in your community will enable every resident to prosper.
Not only will improving and marketing your communities help increase property values, but it will also bring your community and its residents together. Putting community into the community - everyone is happy.
Now it’s time for another survey...
Gail Pizetoski has been a CPA for over 30 years and a NC Real Estate Broker for 10 years. After she founded a Community Association management company in 2002, she earned both the AMS (Association Management Specialist) and the CMCA (Certified Manager of Community Associations) designations from the Community Association Institute (CAI-Industry Trade Group). She is the founder of Condo & HOA Smart, where she provides due diligence of condominium and homeowners associations. The due diligence process includes analyzing the financial health of the association and also determining any potential livability issues for a potential buyer. For more information and to visit a Condo/HOA resource center, visit Condo-Smart.com or view our press release. You can also follow us on twitter @CondoSmart