Invest further in your investment by joining your Executive Committee. Find out why being an active member can boost the value of your property.
Investing in property is generally a positive way to generate lasting wealth for yourself and your family. However, many investors make the mistake of purchasing an investment apartment, handing over the managing rights to a property manager, then doing little more than paying bills when they are due.
Investment properties should never be out of sight, out of mind, even with the very best of property managers on your side. When you take an active interest in your property and the facilities surrounding it, you can help play a role in increasing its value. For a commitment of a few hours a month, there is the potential to see measurable returns.
To maximise the value of your investment property, joining the Executive Committee is one of the best steps to take.
What is an Executive Committee?
Every block with multiple dwellings has what’s known as an Owners Corporation. This includes every lot owner or someone they have nominated to take responsibility for the property. Owners are expected to pay their strata rates and turn up to the premises’ annual general meeting (AGM) or send someone to represent them at this meeting.
The Executive Committee (also known as a strata committee or EC) is a smaller group which represents the owners or owners’ nominees within a strata building of two or more properties.
This committee administers the day-to-day running of the strata scheme in your unit, apartment or townhouse community and is elected at each AGM by the Owners Corporation. Generally speaking, the committee will have between three and nine members.
If you are elected to your investment property’s Executive Committee, you will decide on office-bearer positions amongst yourselves. This includes Treasurer, Chairperson and Secretary.
From there, it is the EC’s responsibility to collectively make decisions on behalf of the Owners Corporation, to ensure the building is maintained correctly, to share meeting notes with all residents, to collect levies and to decide how funds should be distributed.
The EC will meet regularly to ensure the building is being operated and maintained at its best.
Why join an Executive Committee?
As you can understand, an ineffective EC can spell disaster for a number of reasons. Bills go unpaid, insurance is not up to date, tenant complaints go unheard and the building can fall into disrepair. Safety standards slip, faulty lights aren’t replaced and people break the by-laws without consequence.
If you’re interested in increasing the value of your property, it makes sense to become part of the Executive Committee. While it won’t give you total control, you will have much higher visibility over the way the property is managed and maintained.
Of course, you can’t charge in and make self-serving decisions but generally if the building is well-kept and its finances are managed correctly, it will attract a higher standard of tenants who stay for longer and are willing to pay more.
Being part of the Executive Committee also means you are aware of how funds are allocated. If something doesn’t feel right, you can speak up.
To ensure your Executive Committee is acting in the best interests of your building, tenants and fellow lot owners, another responsibility is to hire a high-quality property manager. This professional has a deep understanding of strata and tenancy laws and can assist with things like organising meetings, providing advice on insurers and helping your premises stay in the black financially. Look for a property manager with an outstanding reputation, and who aims to set the benchmark for quality service, rather than doing the bare minimum.
A good Executive Committee and excellent Strata Manager will combine to help minimise expenses, maximise cash flow and keep your building looking and operating at its best.
With this good management, the value of your investment property will increase more quickly. It makes sense to invest some of your time as an Executive Committee member to ensure things run smoothly so you can reap the rewards over time.