Australia’s growing number of apartments, units and townhouses means demand for strata roll managers is increasing. Find out what’s involved.
Real estate professionals looking to build their portfolio or expand their footprint may be interested in purchasing a strata roll.
Take a look at the ins and out of this type of purchase and the potential it brings for business growth.
Strata roll vs rent roll
As a real estate agent, your rent roll includes the details of all the individual properties you manage on behalf of landlords. This may be spread across a wide area and include houses, apartments and even larger properties. Being in charge of a rent roll means you deal with both tenants and landlords to ensure their needs are met.
When you manage a strata roll, tenants are not your direct responsibility. Instead, you have the responsibility for managing the maintenance, insurance and common areas of an apartment block or any other complex with common areas.
Generally, a lease management agreement is for 12 months, while a strata manager is appointed by the strata plan (owners of Lots) for a period of time from 12 months to 3 years.
Why purchase a strata roll?
Right now, there are more than two million Australians living in buildings managed under a strata plan. This is on the rise; as of 2015 there were more attached dwellings being built in our country than houses.
For this reason, taking on a strata roll can be an effective way to grow your business. The longer-term contracts can provide more stability. If you do a great job, you won’t face the problem of individual clients dropping out constantly because you represent the entire body corporate.
Strata roll management skills
Before you take on a strata roll, you should be very clear on the requirements and the difference between strata and single property management.
When you purchase a roll, you will need an accredited manager to manage the units. This person is responsible for implanting the budgets of each plan, managing the building and liaising with lot owners or the managing real estate agent.
Strata roll management involves a lot of moving parts and there is a great deal of accounting work involved. Pressure comes from body corporate representatives, individual tenants, landlords and service providers.
The job is best taken on by someone who is highly motivated, organised and communicative. It will involve dealing with a wide number of people and a range of responsibilities every day. With the right systems in place, it is easier to find ‘flow’ and have regular tasks like maintenance and bill payment automated so they take less time.
How to profit from a strata roll
Making money from a strata roll is all about the numbers. Generally speaking, anything less than 1500 lots won’t be viable. You’ll be spending too much time managing the maintenance, financial and communication requirements without getting enough return.
You should also be clear on which responsibilities you can charge extra for. Strata roll managers should be able to obtain additional fees, including a percentage of the insurance commission and a fee for holding body corporate meetings. You can charge for printing and to supply agents with compliance forms. These incremental fees can add up, particularly if you have a high volume of lots.
Purchasing a strata roll can be an excellent way to grow your property-based business but you need to do your due diligence to make sure it will pay off. With the right lot volume and systems in place, you’ll find it to be profitable.
BDH Solutions have been buying and selling rent rolls for over 30 years. Keep up with our latest listings here.