Tips for buying strata titled property

Commercial,Property ManagementWednesday 4 November 2015
Property-Blog

With the ever increasing demand for higher-density living and working environments throughout our capital cities, strata titled properties have become a far more desirable and profitable option for property investors in Australia.

Whether you are considering purchasing or are already hunting for your own strata titled property, there are some fundamental components of this type of investment that you should familiarise yourself with before finalising any purchase agreement.

Here are our top tips for buying strata titled property:

Every strata titled property is represented by an Owner’s Corporation. This corporation is responsible for the ongoing maintenance of the building as a whole.

In order to be able to conduct the necessary repairs and maintenance on the strata building, the owner’s corporation charges each strata lot owner a levy. This levy may also include services to the common areas (water, electricity charges etc.) and the cost of any necessary insurances for the property.

It is important that you understand your strata levies and ensure that they meet your budget requirements.

Ask yourself:

  • – Will you only be charged for a general administration levy, or will you also be required to pay a reserve levy for future capital works at the building?
  • – How often are the strata levies charged? Are they charged on an annual, quarterly or monthly basis? Does that suit your budget?
  • – Are there any levy increases anticipated for the next financial year?
  • The policies and procedures for how a strata title building is operated and the rules that apply to how the occupants use the building are set out for each owner’s corporation in a series of strata by-laws. The strata by-laws clarify how disputes between lot owners are to be settled, protect the health and safety of the building occupants and maintain the overall appearance of the building.

    Ask yourself:

  • – Are there any by-laws that the owner’s corporation has in place that may conflict with how you intend to use your property?
  • – Are there any proposed by-laws that you don’t agree with? Remember – breaching a strata property’s by-laws can result in enforceable penalties and fines
  • Strata titled properties will usually contain a mixture of owner occupiers and tenanted properties.

    Properties with a higher ratio of owner occupiers to tenanted properties are usually well maintained, with greater attention to detail and a quicker response to minor repairs and maintenance works.

    Ask yourself:

  • – Do you know the ratio of owner occupiers versus tenanted lots within your strata building?
  • – If you are intending to occupy your strata lot are you satisfied that there are a suitable number of owner occupiers to ensure that issues around the property are dealt with promptly?
  • With so many different aspects to consider in purchasing and owning a strata titled property, it is good to know that Burgess Rawson are on hand to help you navigate your way around this type of property.

    Contact us today should you require any assistance or advice with the purchase, sale, lease or property management of your commercial or residential strata titled property.

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