Managing strata rolls can be a great strategy to generate revenue and improve the value of your real estate business.
Where a rent roll covers the leased apartments or homes you manage, your strata roll covers the management of entire apartment blocks, i.e. a Strata Plan. Your strata roll may include a mix of bijou buildings with only 12 units, medium size blocks and larger complexes with up to 200 apartments and car spaces.
Managing a strata plan is a lot of work. The role includes organising garden maintenance, external cleaning and repairs in common areas. It also covers the collection of owner fees, ensuring the building is insured and legally compliant, and working with the owners corporation to make decisions surrounding major works and upgrades.
Despite the workload, a well maintained strata roll can be quite valuable. To add to this, there is always the opportunity to sell all or part of your roll if your business is looking to change directions.
There aren’t many people in the business of valuing strata rolls, however when I offer this service to my clients there are several things we discuss to determine how much it is worth.
Number of lots
The size of your strata roll of course determines the value. We’ll take a look at how many buildings you manage, how many lots there are within these buildings and the average size of these lots.
In many instances, larger complexes are more valuable as managing them can be more cost effective. However, this can be dependent on the current state of the building and grounds, the monthly fees the residents pay and the cost of upkeep.
Length of contract
If you are selling a strata roll and the contract is due to expire within a six month period it may be harder to find a buyer than if you still have responsibility for the building for three or four more years.
Take this into account if you are looking to sell and be strategic with your decision making.
Location
When it comes to rent rolls, it is much easier if all properties are in the same suburb. With strata rolls it is not so necessary, however if there are several blocks being managed within the same vicinity it can be easier to save time on site visits.
What’s more, the value of strata rolls can vary depending on the state they are in. This is another factor to consider when looking to sell.
Efficiency
If your strata management business has a seamless network of software in place which makes your levy collection and property management a less convoluted process, your strata roll will be more appealing to buyers.
Ancillary fees
Savvy strata management agencies optimise their profits by transferring almost every expense back to the property owners within a strata building.
This can include phone calls, postage and handling, site visits and time spent at owners corporation meetings.
A well organised strata roll will clearly state which costs are currently being claimed so whoever takes it over with be able to continue collecting the same fees.
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