Strata business planning
Buying or selling a strata portfolio.
Selling your strata business, or buying a portfolio to start or grow one? Our Client Success team introduces buyers and sellers in confidence, drawing on 34 years in Australian strata.
Confidential introductions
We make the introduction. Then we step back.
Step 1
Talk to us
A confidential conversation.
Tell a Client Success Manager whether you are buying or selling, and what matters to you: size, location, timing, and the clients and staff involved.
Step 2
Introduction
The right buyer or seller.
We know strata businesses across the industry, from national groups to local firms, management buy-outs and new starters. We introduce you to people who fit.
Step 3
Your deal
You take it from there.
You negotiate directly with each other. We do not take part in negotiations.
No charge for the introduction.
Before you start
What to be clear on.
Selling a strata portfolio
Before you go to market:
Why now
Where you are in the life of your business, and why this is the time to sell.
What it is worth
The value of your portfolio, and what could lift it before a sale.
Your clients and staff
The service your clients will get, and what happens to your team.
The right buyer
Their reputation, and whether your cultures fit.
Your role afterwards
Whether you stay on, and for how long.
Key person risk
How much the business depends on you, or on one other person.
Buying a strata portfolio
What most often decides whether it works:
The vendor
Purchases go best when the vendor comes through someone you trust, with a record of success.
Cultural fit
Many mergers fail on culture, not numbers. Shared values make the months after settlement smoother.
Systems
Moving buildings off other software takes planning.
Signed agreements
How many agreements are signed, and how long each has left to run.
Other risks
A market downturn, losing a major client, or key staff leaving after the sale.
Valuation
What is a strata portfolio worth?
Most portfolios sell for a multiple of the annual management fees under contract. Larger businesses more often sell on a multiple of earnings. Multiples are set by the market, and these are what move them.
Location
Where the schemes are, and which state's market you are selling into.
Size
Lots under management, and the average size of each scheme.
Spread of clients
Fees spread across many schemes are worth more than fees from a few.
Signed agreements
How many agreements are signed, and how long they run.
Systems
The software and processes the business runs on.
Reputation
How clients and the industry see the business.
Questions
Common questions.
How is a strata portfolio valued?
There is no single formula. Most portfolios are valued as a multiple of the annual management fees earned under contract, sometimes called administration or secretarial fees. Larger strata management businesses are more often valued as a multiple of earnings.
Multiples change over time and differ from state to state. Smaller portfolios, and those where a few clients pay most of the fees, generally sell below the average. For a formal valuation, talk to your accountant or a business valuer.
How can I increase the value of my portfolio before selling?
Lift profit, or strengthen the fee base a buyer is paying for.
- On profit, look at office efficiency, internal cost controls, staff retention, your pricing, how fully you recover additional charges, and staff training.
- On the fee base, look at lots under management, average scheme size, and how many agreements are signed and for how long.
Does an all-inclusive fee model affect value?
Some firms charge an all-inclusive fee that covers services usually billed as extras. That can trim total revenue slightly, but it makes income more predictable for the strata manager and costs more predictable for owners.
Who buys strata portfolios?
Large national strata companies, local strata businesses, management buy-outs and buy-ins, and new strata businesses getting started.
Is there a charge for an introduction?
No. The introduction service is free.
Do you take part in negotiations?
No. We make the introduction and step back. Price and terms are between the buyer and the seller. Some sale contracts set the price as a multiple; others say nothing about how it is reached.
The portfolio I'm buying runs on different software. Can you help?
Yes. Moving buildings onto StrataMax is planned and run with a Client Success Manager. See how a move onto StrataMax works.
Why StrataMax
Years in Australian strata management
Lots managed across Australia
Invoices approved last year
Confidential enquiry
Thinking about buying or selling?
Talk to our Client Success team in confidence. Tell us where you are at and we will be in touch to talk it through.
Prefer to talk? Call 1800 656 368.
Tell us a little about what you have in mind. Everything you send is treated in confidence.