Team ADDA organised a special Interactive Webinar Episode on January 23, 2021 on the nuances of Budgeting In Apartments. Here are the takeaways from the Session.
Budgeting In Apartments : The Takeaways
- Before Budgeting for your Apartment, ensure all financial records of Previous Years are appropriately audited, verified and signed off by your Auditor. A best practice is to have two statements – Half Yearly and Annual.
- Prior to Apartment Budgeting, negotiate all AMCs. The bulk expenditure goes to Asset Management. This will give a fair idea of fair distribution of funds.
- Analyse Income & Expense trends of previous financial years to arrest Fund Leakage.
- Divide your budget into OPEX (day to day expenses), CAPEX (long term expenses), Contingency (emergency expenses).
- Principles to prioritise your CAPEX budgeting – impact on Revenue, impact on longevity of assets/property, preventive maintenance.
- Consider investing part of the Revenue.
- Strategise and implement Cost Optimisation methods.
- Bring in Digitisation to balance Expenses versus Income.
Q: What should one keep in mind when taking the Financial Handover from the Builder?
A: The following documents should be in proper order :
1. Deed of Declaration
2. Status of collected Corpus Fund, Taxes & complete Financial Statement.
3. Ownership/transfer of ownership status of lifestyle (clubhouse, gym, swimming pool, etc.) and parking facilities.
You can check out more details here.
Q2. How to choose your Association Bank?
A: Check if the Banks satisfy the following criteria :
1. Verified & approved by RBI.
2. Success rate with maintaining high value accounts.
3. Interest offered as per Market Trends
Q3. Is it advisable to make Capital Expenses from the Regular Income?
A: It is strongly advised to utilise regular income for day to day expenses. Capital expenditures are large in nature and it is advisable to build a corpus fund to take care of such expenses in budgeting in apartments.
Q3: What are alternative revenue generation streams for Housing Societies?