Considering buying into strata?
There seem to be more people considering buying into strata in the hope of securing a home or investment. As agents, we are constantly asked what are the to-dos when buying a strata property.
Strata property appeals to many for an array of reasons. Buyers that cannot afford the price of a free-standing house, investors, downsizers, those that want a maintenance-free lifestyle and people that love amenities. It is important to know that when considering a strata property there are a few additional steps required.
- When buying into strata pay close attention to the building and gardens. This is a very good indicator of the level of interest of the owners. Well-maintained buildings generally mean the finances and property are also in good condition.
- If you inspect a strata property and you would like to proceed, your sales contract will include the unit entitlement and the portion of fees you will be required to pay quarterly for that entitlement. These fees are called levies and they represent the maintenance the building requires.
- Strata fees are quarterly so need to ensure you budget for them going forward. These fees are needed to pay for insurance, general maintenance and any repair work required. If the property has amenities or lifts the fees are generally higher. Budgeting for levies is important as late fees can attract substantial interest charges.
- You should purchase the strata report when buying. That document will outline the finances and history of the property. Your solicitor or conveyancer will review the report and highlight any issues of concern.
- As a potential owner, you will become part of the Owners’ Corporation. You need to read up about your rights and responsibilities as an owner. The Owners’ Corporation manages the common property of residential, commercial, retail, industrial, or mixed-use property development.
- Any changes you might want to make must be approved by the Owners’ Corporation. If you are thinking of updating the bathroom or kitchen that will need to be approved. This is usually procedural as most changes are permitted. However, as you may impact the structure of the building or another owner’s property, the building and the other owners must be indemnified.
- As a new owner, you may consider whether you would like to be involved in the maintenance of the building by joining the Committee. The Committee is the group of owners that represent the block when decisions are made for the development.
Buying a unit or townhouse can be a fantastic first or last step in your property journey. Having a to-do list helps ensure you have covered all the important considerations.