Looking to add a strata roll to your real estate agency portfolio? It can be a great strategy but it does differ to your standard rent roll.
Most real estate agencies rely on their rent roll for their ‘bread and butter’ revenue while the property market hits peaks and troughs.
With strata buildings popping up all over the place, it now makes sense to add strata rolls to your portfolio. Doing so gives you a way to diversify and grow your business.
But what’s the difference between a strata roll and a rent roll, and how does the day to day management compare?
Strata roll vs rent roll
While a rent roll includes all the individual properties you manage and the contracts you have with the owners/landlords, the strata roll is more encompassing and includes entire blocks of property. These blocks may include residences, offices/workspaces or they can be a mix of the two.
Your strata roll could include small properties with less than 20 lots or larger complexes with up to 200 apartments, workspaces and parking spots.
Managing a strata roll involves looking after common areas as well as helping the Owners Corporation and Executive Committee to take care of fees, insurance and compliance. You may also need to help the people involved with the day to day running of the building make decisions surrounding major works and upgrades.
How managing a strata roll differs from a rent roll
When you sign on individual landlords, their contracts will all stop and start at different times. Generally, the agreement will be for 12 months to start with, then it will continue on a rolling basis.
For a strata roll, you’re overseeing all the properties on a block for a set time. This may be up to 200 properties. You won’t have individual properties dropping in and out of your care within this contract, so in a way you are more assured of greater income on an ongoing basis.
Your point of contact when you manage a strata roll is the Owners Corporation or Executive Committee. You won’t be liaising with lot owners or tenants themselves.
Generally with a strata roll, to make it worth your while, you will be dealing with a greater number of units. This means your skill set must be slightly different so you can accommodate requests and responsibilities on a larger scale. The advantage here is one strata roll manager can take on up to 300 properties. With a rent roll, the maximum is generally around 150 before a property manager is overwhelmed and becomes less effective in their work.
As the number of properties is greater when you manage a strata roll, distance is less of a factor. With hundreds of separate residential properties on your rent roll, it makes sense for them to be close to your office. As a strata roll owner, you will only need to make a single trip to take care of dozens of properties at once. What’s more, this trip will likely only be for major events like AGMs.
As increasing numbers of buildings become mixed-use, your skills will need to expand again. You’re likely to deal with offices, shops, cafes, industrial spaces and even warehouses, all under the same strata roll. Each of these lots have different needs and expectations. The person you appoint to manage them will need to understand how to quickly arrange compromises and ensure nobody feels they are being treated unfairly.
While specific skills are required, generally with a strata roll manager the turnover is lower. In Victoria, the average tenure for a property manager is eight months. With strata roll management, perhaps because there are fewer individuals to deal with directly, managers tend to stick around for longer.
Unless you really wish to specialise, there’s no need to step away from your rent roll completely. However, adding a strata roll can improve the long-term value of your agency and be a good strategy for generating sustained income.
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