Value Strata Spending

Strata owners continuously pay money to their strata corporations as quarterly or monthly strata levies.


In Australia that ranges from a low of about $1,000 per year to more than $10,000 for upmarket apartments.  The average is somewhere around $3,000 per year per owner (my guesstimate since there's no available data).  Which means they're paying 0.8% of the value of their property (assuming an average strata property value of $375,000) every year.


So, it's no surprise that strata owners are always interested in keeping strata levies low and resist increases.  You can't blame them.


But it occurs to me that trying to stop levies rising is only one side of the levy equation and that managing strata expenditure better can achieve equal or better results. 


SSKB (one of the leading Queensland strata managers) published this pie chart of what strata corporations spend money on (source http://stratablogger.com.au/2012/06/levies-spent/) and it reveals many areas where significant amounts are spent by strata corporations year after year.  


I'm not suggesting that strata corporations can spend less (although in isolated cases that's distinctly possible), but that they can get better value for what they already spend and, therefore, save money in the medium and long term.


This is especially so in relation to capital works, repairs, maintenance and utilities which each represent 10% or more of strata corporation expenditure and involve specialist knowledge and expertise.  There are many good and bad examples of strata corporations spending more than is necessary and/or getting inferior outcomes on all these issues due to poor information, poor decision making and poor implementation.


Ultimately, its about getting value for the strata dollars being spent.


I predict that Strata Value Spending will become the key feature of good strata management and operation when everyone finally realises that compliance with existing laws is not good enough anymore and not what strata owners care about.


So, think about how you can give strata owners Strata Value Spending to get ahead of the strata curve and be part of its future.

Francesco ...