At the last count, there were over 350,000 strata schemes in Australia. That translates into about 3 million homes. A significant number of these are in Queensland.
Each one of these homes is likely to need a little TLC at some point, whether that be a fresh lick of paint or a new roof. Property sinking funds are the pot homeowners pay into on a regular basis to ensure there’s always enough cash to pay for any maintenance issues.
Find out more about sinking funds for homeowners as we examine their importance in property investment.
Stay on the Right Side of the Law
It’s probably a universal truth that most of us would prefer to spend our hard-earned cash on something more pleasurable than a blocked drain. It’s no surprise then that in the past it’s been necessary to drag some homeowners in strata schemes kicking and screaming into parting with money to spend on essential maintenance.
The danger is that if everyone behaved in that way, especially when there are shared common spaces in a strata building, nothing would ever get done. The result would be potentially unsafe structural problems. It could even lead to a drop in property value because new owners would get put off by the prospect of costly repairs in the future.
A Long-Term Plan
All this is one of the reasons why there are such strict rules around sinking funds in Queensland. In most cases of strata management, sinking funds for homeowners are a legal requirement. Bodies corporate must prepare a sinking fund forecast. This acts as the basis for providing for future maintenance expenses.
The sinking fund budget gets based on estimates of future spending. It must factor in raising the necessary capital for reasonable spending on any current major works. It also needs to act as a reserve for anticipated major expenditures for the following 9 years. That means, in effect, there needs to be a 10-year plan.
Sinking Funds Future-Proof Your Investment
You might think that the story ends there but it doesn’t. When you own a strata title property, you need someone who has the time, expertise and experience to manage the sinking fund properly.
QBM has years of experience in the organisation of sinking funds for all types of building complexes. You can then rest assured that there will always be sufficient funds to meet maintenance costs and upgrades that adhere to all legal requirements.
When you buy a strata property, you want to know what you’re getting into. You need to understand your liabilities. These include the current state of any maintenance issues related to the building’s common areas. Prior inefficiencies that point to the risk of future complexities can be a turn-off for potential buyers.
Helping Your Property Retain Its Value
A well-managed sinking fund is your ticket to a more secure future.
You may be planning to continue living in your property for many years to come. If so, the properly looked-after sinking fund offers you security. It ensures you’re legally compliant with enough money to spare in the communal pot to pay for maintenance costs.
You may want to move on at some point. You’ll have the reassurance that the existence of a well-run sinking fund is an attractive selling point for any potential buyers.
Let the Experts Manage Your Sinking Fund
Here at QBM, we have years of experience in working with owners’ corporations and managing property sinking funds of all types and sizes. We are experts at making forecasts for the years ahead.
We can also help ensure that the owners of all properties within strata buildings meet their obligations. That’s by ensuring they pay the correct contributions to sinking funds in a timely fashion.
Find out more about our strata management services by getting in touch with us today.