Property Ladder Realty - Cairns Airbnb Management

Palm tree apartments administration fund is $70,670 for the year

I will use Palm Tree Apartments for the example of Administration Fund and why you need it

This is a complex of 44 units, with 24 of them being bedsit units and 20 being 2-bedroom units. The complex was built in 1995 and is a besser block, three storey, bomb proof place. It isn't the prettiest, but it is perfect as an investment.
Bank Charges $30

Cleaning $3,000 - This is a big complex and tenants are forever leaving junk near the bin and around the complex. For me to be able to charge it on to the tenant that dumped it, I have to have a witness to say it was them - and even then, how I am going to prove it? I have within this cleaning budget an allowance to take things away.

We also have someone go to the complex once a week and check the lights, pick up the rubbish and generally make sure it is clean and tidy. They also report any damages - basically they are my eyes. It also allows for basic pressure cleaning of the paths after the wet season.

Community Power $4,600 - At this complex we have a swimming pool and this pump accounts for about 30% of the bill. We have lights throughout the car park and stair wells that come on at dusk and turn off at dawn. The place is lit up like a Christmas tree - and I can't have it any other way. I want our tenants to feel safe when they come home - there are no dark corners for people to hide in.

Fire Protection $500 - this complex is the only one that we have that has fire hoses on the common landings and we must have them tested each year. We also must have a Fire Evacuation Drill completed each year, as well as all the signs checked.

Gardening $7,700 - this sounds like a big part of our budget, but I can tell you the difference having a well-presented building has on potential tenants. The gardens are a big part of this, and we continually improve and maintain them. It has been a long process that has taken us about ten years to produce the results we have today. I deliberately took the slow and steady approach rather than spend tens of thousands at one time - this would have given us good results, but the owners would have had to dip deep into their pockets which I didn't want to see happen. The complex has flourished since then, but these will give you an idea of what can be achieved.

Insurance $35,000 - this is 50% of our budget and there simply isn't a thing I can do to decrease it. When you look back and remember that it used to be $6,000 per annum, you can directly see why the levies have increased. I am hoping there is light at the end of the tunnel, there certainly appears to be a lot of talk from the Government acknowledging the issue. At least the premiums seem to have stabilised for now.

Pest Control $1,000 - I have the common areas inspected every six months to be sure we don't have any active termites. The complex is a concrete bunker so there isn't a lot of timber in it, but I still want to be sure we have none around. This is about half of the budget. With the other I have it sitting in reserve. With all the rain, we get rodents and these need to be treated. When I know they are about we get the baits refilled and knock a hole in the population.

Secretarial Fee $6,200 - this is the fee that Body Corporate Services charge for their secretarial service. Even if we were in a smaller complex, I would have them do this side as they know what they are doing. It works out to be $140 per owner and I think this is money well worth spending.

Taxation Fee $650 - because we earn interest on the money we have sitting in our account, we have to lodge a tax return. There is a quarterly return that we must submit with our income - this is just the interest and not the levies themselves.

Communication and Outlays $4,000 - this is what Body Corporate Services charge us for Postage and Stationary. We have a fixed fee, which makes budgeting easier for me. The cost per owner is $90 - this covers the issuing of levies, the AGM papers and lots more.

R&M Electrical $1,000 - this sits there for when and if I need to send an electrician out. Let me tell you the tenants can be sitting in darkness in the car park and stair wells, but as soon as the booster to the aerial loses power and they can't watch TV - the phone runs hot. There are some years that we spend more than this, and others where they aren't called out. Some of the cost is out of our control - vandals break the lights and I have to send them out.

R&M Plumbing $1,000 - This complex was built slightly later than some of the others we are involved with. So far, we have been lucky and the number of burst pipes we have hasn't been a lot. City Park on the other hand has battle scars all over the car park where they have had to cut the concrete to get to the burst.

R&M General $2,000 - things are going to go wrong, or need to be done so I have this sitting there for just these times. It can range from getting the carport gutters cleaned out, the replacement front doors - which body corporate are responsible for. The owner is responsible for the security screen door, but not the wooden door. The other interesting one is that body corporate is responsible for the shower screens, but not the vanities. Fortunately, we have this down pat and in a great price range thanks to Bart our Wonder Handyman.

R&M Pool $4,000 - this is the one thing that if I could get rid of easily I would. No one uses it except for the neighbourhood kids that come and cause drama. It is costly to service and have the power running the pump - but tenants just love to know there is a pool in the complex. I make allowances for things that can and will go wrong - chlorinators, pumps, cyclones dumping lots of debris in the pool, the wet season with all the rain and a whole load of other things.

The total is $70,670 or in the case $1,104 for the bedsit units, and $2,208 for the two-bedroom units.