Living in a strata plan or scheme is much like being part of a community, offering a distinctive lifestyle filled with perks. However, as part of this unique lifestyle, body corporate or owners corporation fees such as strata levies, utilities, management costs, and maintenance of common areas are inevitable.
Effective budget management may seem complicated when faced with fluctuating interest rates, rising utility costs, increasing labour charges, and an overall uptick in daily expenses. However, with careful budgeting and strategic planning, you could gain a clearer overview of your finances to enable accurate calculation, planning, and management of your strata costs.
But where to start? The first step towards mastering your strata finances is understanding your body corporate and owners corporation fees. Knowing how to calculate these strata fees, have a firm grasp on what they cover, and learn how to budget effectively around these costs is crucial.
1. Comprehensive budget planning
2. Explore cost-saving ideas with your committee
3. Revisiting budgets and levies
4. Prioritising preventative maintenance
5. Embracing energy efficiency
6. Reducing common property utility bills
Crafting a personal budget that captures all expenses can be the key to maintaining financial health and peace of mind.
Before diving into your budget, it is essential to grasp all strata-related costs included in your levies and fees.
These could include:
Levy costs can vary based on building size, facilities and design. Click here for more information on the factors that may influence your levy payments.
Additionally, a portion of your budget should be for unexpected strata-related or personal expenses, which can be a real financial lifeline when unforeseen repairs or emergencies arise. Creating a comprehensive budget could help you navigate personal finances, around your owners corporation or body corporate living experience and minimise financial surprises.
When managing your body corporate or owners corporation fees, collaborative input can be a game-changer. Facilitating open dialogues with property owners and residents about budget affairs can instil a sense of collective responsibility, paving the way for enhanced financial transparency and bolstering community engagement.
Engage actively with your committee to have a say in crucial decisions related to budgeting and spending. Informed and engaged community members are more likely to support and contribute to cost-saving initiatives such as organising bulk rubbish removal days, negotiating insurance premiums, or sharing resources for minor repairs and maintenance tasks.
In a world of rising costs, prevention is undoubtedly more budget-friendly than a reactive approach. That is why prioritising preventative maintenance is a savvy financial move.
Your owners corporation or body corporate should have a capital works or sinking fund and a maintenance plan detailing the costs and upkeep of future capital expenses such as painting the building, driveway refurbishment or replacing common property items.
Regularly reviewing and updating this plan allows your committee to effectively schedule maintenance and repair work. Continuous monitoring could also help better anticipate funding requirements, potentially even predicting the need for a special levy to top up your capital works fund, sinking fund or maintenance fund.
To gain better financial transparency on budgets, make it a point to review this plan every 12 months, possibly during a property walkthrough, to check the past year’s completed tasks and gauge if additional maintenance and repair work is required.
By allocating resources to address potential issues before they become costly problems, your owners corporation or body corporate could save money in the long run and shield your budget from unexpected financial shocks. This proactive approach may help to protect your property’s safety, structural integrity, and long-term sustainability, potentially reducing the need for expensive emergency repairs. To learn more about strata repairs and maintenance, download your free Community Living guide on building compliance. Or click here for a building condition report from our BFMS facilities management team (NSW only).
For strata committees, owners corporations, or body corporates, revisiting the current budget decided at the last Annual General Meeting (AGM) could be a strategic move to help the community find ways to minimise unnecessary spending.
This process begins with re-evaluating whether each proposed expenditure item is an essential or legal requirement. Reviewing these expenses allows the body corporate or owners corporation to prioritise expenditures crucial to the strata community’s functioning and legal compliance while potentially postponing or cancelling non-essential or discretionary spending.
Following a re-evaluation, the owners corporation or body corporate can convene a general meeting to reassess and reset the levies according to the revised budget. By doing so, the corporation checks whether levies accurately reflect the current financial realities of the strata community amidst the rising economic pressures.
Proactive and thoughtful financial management is a key factor in supporting the upkeep of your property and eases the financial burden on individual residents, fostering a sense of solidarity and resilience within the community.
You can learn more about how your strata levies are calculated in our free article here.
There are numerous opportunities for energy-efficient upgrades within your community. In today’s eco-conscious world, energy efficiency is more than just a trend – it’s a necessity that reduces environmental impact and helps yield long-term savings on bills. Here are some key areas where you can embrace energy efficiency on common property or individual lots:
In addition, the expertise and partnerships of services such as CommunityGreen can help your owners corporations or body corporate find opportunities to achieve sustainability, increase property value, and open doors to potential savings.
By harnessing these resources, your committee can access the support needed to make informed and progressive decisions to help create a thriving environment for future generations. Advocating for energy-efficient upgrades in your individual or common areas is a win-win situation. These upgrades contribute to a more sustainable environment and result in long-term savings, making them a wise investment for any community. Click here to learn more about how CommunityGreen can empower sustainability for your property.
Another way to manage strata costs revolves around controlling utility expenses. One effective strategy to achieve this is by exploring competitive market rates for common property utilities.
In the current competitive market, utility providers offer a variety of plans with diverse pricing structures. Some providers may offer lower rates during off-peak hours, attractive bundle deals, or green energy options at competitive rates. Navigating through these various options can seem overwhelming, but this is where a strata manager can help.
Strata managers are experienced in dealing with utility providers and can assist in negotiating a plan that is best suited for co-living communities. You can collaborate with a strata professional to explore collective cost-saving measures for the community, such as energy-efficient upgrades or plans best suited to your property’s needs. By leveraging services such as CommunityUtilites, strata plans or schemes could access no-obligation energy assessment to help find improved competitive energy rates most suited for their property. Click here to learn how CommunityUtilities can help discover cost-saving opportunities on your common property energy bills today. By actively exploring competitive market rates and making informed decisions on utility contracts, you can drive potential ongoing savings on your energy bills.
Exploring ways to budget and manage costs effectively is an important factor to consider each year for committee members and property owners across New South Wales, Queensland, Victoria, Northern Territory, and Tasmania. Thankfully, this is a challenge you don’t need to face alone. Experienced strata managers can be your greatest allies in this quest, offering a wealth of knowledge and expertise. They can assist in identifying potential cost-saving opportunities, negotiating effectively with service providers, and guiding efficient property management.
Successful navigation of these financial challenges can be achieved by working hand in hand with your strata manager and embracing proactive budgeting practices. These practices can include careful planning, regular monitoring of expenses, and necessary adjustments along the way. Remember, proactive financial management isn’t just about maintaining the financial stability of your strata community. It also plays a significant role in enhancing the overall living experience for residents.
To learn more about managing your strata property’s financials, download our FREE Community Living guide here. We also provide our customers with an intuitive, modern, easy-to-use dashboard and 24/7 access to their financials and related information via CommunityHub. Or, to find out more about the services we offer, click here for a free strata assessment.