Model reduction methods have primarily been used in the field of the structural dynamic analysis to reduce the computational time. However, it has progressively been extending to other engineering practices like the damage detection to extract the structural response by means of limited monitored degrees-of-freedom. This paper aims to improve the iterative dynamic condensation method, as a convenient method of the model reduction, for better assessment of the structural dynamic properties. The improvement consists of: (1) Capturing different modal frequencies by applying an iterative perturbation near the frequency obtained from the static condensation. The perturbation is evaluated in a manner that there is no need to solve eigenvalue problem successively; (2) Developing virtual dynamic condensation (VDC) procedure to generalize unique reduced stiffness and mass matrices, reflecting the influence of all modes of vibration, needed for a complete dynamic analysis. Finally, the accuracy of the proposed VDC method was proved by solving three examples.