The strata world can be a confusing space to dabble in but it has it’s pros and cons.
Anna Porter, property commentator, valuer and Suburbanite CEO, busts some myths and also hands down some top tips for strata living and investing.
“With strata, owners don’t own the whole building of the land as such, they own the right to enjoy the space within their lot, so its typically applied to unit’s townhouses and villa homes,” explains Anna.
“The strata attract additional fees to run and maintain the complex and common areas, cover insurances and other such items, known as strata fees and typically range from about $400 per quarter up to as much as thousands of dollars per quarter – depending on the size and management processes.”
Like any property type, there are some pros and cons.
“Generally, with strata properties, there is a lower buy in price compared to free standing Torrens titled homes and also there’s lower maintenance as much of it is covered by the complex managers,
“The insurance is also managed by the managers and sinking funds or future funds are usually established to look after the building into the future,”
“A well-run complex can also have a good community feel and be attractive to its residents,” says Porter.
“On the downside, strata fees need to still be paid regardless of whether you use the facilities like pools and tennis courts. The living arrangements are also denser which can create more arguments and noise complaints,”
“It can also be harder to have pets and some occupants don’t respect common areas and litter with garbage and other items which can create a disharmony to take away from the community feel,” warns Porter.
Busting common strata living myths:
- Strata fees are an additional expense that houses don’t have so they cost more to hold.
“This is often untrue as the fees cover things like building insurance, maintenance, future funds and sinking funds are contributed to annually as opposed to dealing with large maintenance items as they arise and they will inevitably arise in houses too and part payment for council fees and other various government rates and charges. In a well run complex the fees will be comparable with houses but people often don’t compare them correctly and look at exactly what is absorbed in them,” reminds Porter.
- You can’t have pets.
“You actually can but there are various regulations around this and they require approval and should be appropriate (ie: no loud birds like a Macaw or large or loud dogs). Companion pets are very hard to refuse,” says Porter.
So what are Anna’s top tips for checking out a strata complex before buying?
“First and foremost, buyers must check all the common areas, not just the unit they are buying or renting. I’ve seen people dumping mattresses and bags or rubbish and common areas…this indicates a lack of respect amongst the residents as they don’t see the common areas as any one particular person’s property,” says Porter.
“When buying, you must also always get a strata report done by a professional – these are crucial,”
“Professional reports reveal things like disharmony in the building, outstanding levies which are payable by the new owners if they’re for your unit, previous known defects and upcoming spending on major items and if there is even a budget for that,”
“Too much money in a sinking fund can also indicate issues…for example I recently looked at a strata complex with a spare $3mil which looked great on paper but that was because of a recent pay-out from a court case against the builder for major defects that would be an ongoing problem for the residents,” shares Porter.