What you need to know about strata reports and inspections
For decades, a home with a decent block of land has been the great Australian dream. However, a crazy property market and shrinking block sizes have given many homebuyers enough reason to avoid the long commutes in favour of living closer to the city.
Low-priced strata properties like townhouses and units are seeing more demand due to increased affordability, less maintenance, and the advantages and convenience of city living.
Purchasing a strata title means you are buying into a property where some of the ownership is shared by the owners, so it’s a little different to purchasing a freehold property. Here are a few things you should be looking for when purchasing a strata property from a licensed and experienced Sydney conveyancer.
Difference between freehold versus strata properties
A freehold property is a free-standing house on its own block of land. Freehold property owners are responsible for the upkeep and maintenance of the entire property.
A strata title property gives you individual ownership of a part of the property, with common areas shared by the body corporate (owners corporation) that you become a part of when you purchase the property. Maintenance, repairs, and renovations are handled by the body corporate fund that all strata title owners must contribute to.
Owners versus investors
Strata properties with a higher proportion of owner-occupiers than renters are usually a better proposition. Owners are more invested in their properties and the common areas, so these properties are often better maintained.
Look at the number of properties. Smaller complexes with fewer properties usually command higher resale value and have more affordable administration and body corporate fees.
Review the strata report
You should always have a professional go over the body corporate financial records and strata report. You don’t want to inherit lawsuits or major expenses from the previous owners or miss out on using them as bargaining chips for a lower price.
When going over the strata report, make sure you understand the
- Past and pending building works
- Current levy costs
- Will there be any future levies?
- Ten-year budget
- A summary of expenses for at least the past two years.
Check the building’s history
Reviewing the repair and maintenance history will highlight ongoing problems and show you how well the property is cared for. A property that hasn’t been properly maintained or regularly inspected could be hiding a costly repair bill that will come out of the new owner’s pocket, which could be you.
Planning to buy an apartment in Sydney or anywhere in NSW?
Buying a strata property can be an excellent investment with a lot of advantages. However, you need to be mindful of the pitfalls when searching for your next home. Joanne and the team at Platinum Conveyancing Services can help you do your research and make sure you don’t miss any important details.