October 6, 2025

How to Grow EBITDA in Your HOA Management Company

If you’re planning to sell your HOA or condo management company, or just want to increase what it’s worth, there’s one metric that matters more than any other: EBITDA.

Whether you’re preparing for an exit or looking to tighten up operations, improving EBITDA is the most direct way to grow the value of your business. And in this industry, even small improvements can have a big impact on what buyers are willing to pay.

What Is EBITDA and Why It Matters in HOA Management

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It’s a standard measure of a company’s operating cash flow that’s used to compare businesses regardless of how they’re financed or taxed.

In a sale process, EBITDA is usually “cleaned” of personal and non-recurring expenses, better known as add-backs. Examples include an owner’s car lease, one-time legal fees, or a family member on payroll. These are removed so buyers can focus on the underlying profitability of the business.

EBITDA is used as a proxy for how much cash a company actually generates. In many industries, that number can be misleading because you also have to spend heavily on things like equipment, inventory, or machinery, or big-ticket items that don’t show up on your P&L but still affect cash flow.

But in HOA and condo management, EBITDA closely mirrors real cash flow. This is a service-based business with low capital requirements. As a result, EBITDA is the key number buyers use to value your company and the best indicator of what it’s worth.

The good news: there are straightforward ways to grow it.

Grow Management Fees and Ancillary Income

The most obvious way to grow EBITDA is by increasing revenue, especially the kind that sticks. That means signing new communities, raising fees for existing clients, and capturing more value from the services you’re already providing.

Start with core management contracts. Adding new associations or increasing your monthly fees (even slightly) can have a big impact. Because some of your operating costs are fixed, a large portion of that that new revenue goes straight to the bottom line.

Then look at Schedule A and ancillary income. Common high-margin items include:

Transfer and estoppel fees
Insurance claims support or commissions
Document storage or retrieval
Portal and technology surcharges
Banking-related income

Many companies undercharge (or don’t charge at all) for these services. By adding additional Schedule A and ancillary income, you can boost the value of your business significantly.

Be Selective About New Services

Some management companies branch into adjacent services like in-house maintenance, handyman work, or even construction oversight. These can boost revenue, but they don’t always boost EBITDA.

Before adding a new line of business, ask:

Will it generate clear, reportable profit?
Will it distract from your core operation?
Will it complicate your financials or make the business harder to run without you?

If the answer is yes to any of those, proceed carefully. Buyers generally prefer simple, service-based models with clean margins. If your maintenance arm is profitable and standalone, great, it adds value. But if it’s breaking even, hard to track, or heavily reliant on you personally, it might actually drag your valuation down.

EBITDA Growth = Business Value Growth

Your business is worth a multiple of EBITDA. And in today’s market, that multiple is healthy, especially for companies with recurring revenue, strong contracts, and solid margins.

Here’s the key idea: grow EBITDA by $100,000, and you may grow your business value by $400,000 to $600,000 or more, depending on your size and buyer type. That makes every improvement meaningful.

The focus shouldn’t be on eliminating every personal or one-time expense, since those will be adjusted out later. Instead, spend your time increasing the durable, transferable cash flow of your business. That’s what buyers care about, and it’s where the real money is made.

Final Thoughts

In HOA management, EBITDA is everything. It’s not just a financial term. It’s the number buyers use to value your company and the clearest signal of how well your business runs.

If you want to grow your company’s worth, focus on adding profitable clients, capturing more ancillary income, and avoiding distractions that don’t improve the bottom line.