Buying a strata property is a scenario where you purchase a small portion of the complex and get access to common property such as driveways, gardens, parks, etc. The reason why this is such a popular option in Australia nowadays is due to the fact that it gives you a lot of privileges of being a homeowner while limiting your maintenance-related responsibilities. Still, there’s so much more for you to take into consideration here. After all, some business investments are better than others. But investing in property, of any kind, is a major financial decision. With that in mind and without further ado, here’s what you need to know about buying a strata property.
Inquire about what are you buying
In the introduction, we’ve mentioned that you’re getting a part of the property that you own and a part of the property that you can use. However, there’s no general rule or a law when it comes to what you get and how much of it will be at your disposal. This is why you need to check the strata plan and by-laws before you decide to commit and make a final purchase. Seeing as how these documents might involve a ton of legal terms that you might be completely unfamiliar with, it might also be a good idea to consult an expert (either specialized in legal services or real estate).
What do you actually own
One of the first things that you need to ask is – what do I actually own? Here, the rules are often quite specific and easy to understand. For instance, you own the floor coverings, the airspace within the apartment but you do not own any external walls which are still in the ownership of the company that owns the strata. Knowing what you own also determines your level of responsibility. You see, as an owner, you’re merely responsible for your own lot. As far as the maintenance of the rest of the structure goes, this belongs to the owner’s corporation.
Research the specific property
Same as investing in any other type of real estate, it’s the location and the state of the place that will determine the value. For instance, getting a strata property in Sydney is a completely different experience than getting one in Melbourne or Brisbane. This is why you need to localize your research and check out the rules of the local community, as well as state regulations.
Can you renovate?
As far as the question of the strata renovation goes it, once again, depends on where you intend to introduce this renovation. For instance, if you plan to renovate the common property, you’ll face a scenario in which your request will be brought up to a committee for a vote. The level of necessary authorization often depends on the type of change that you plan to introduce. In general, there are three types of renovation projects that you can face – cosmetic, minor and major renovations. The first type merely requires you to notify the committee, the second one requires that the committee votes and the last (major) type require a special resolution at a general meeting.
Future capital works
The last thing you need to bear in mind is the likelihood of any major capital works in the future. This is due to the fact that, once it’s up for a vote, the majority of 75 percent of residents can force 25 percent to sell their block in order for this area to be replaced with something new. Now, this is always a risk, as well as something that a lot of people wouldn’t be too comfortable with. Still, when buying, you can always inquire about any such plans for the future and then refrain from investing if you find your fear to be justified. While this plan is not 100 percent fail-proof, it still provides you with no small amount of reassurance.
The very last thing you need to take into consideration is the fact that a strata property is merely a model of real estate. This means that your investment can be a good or a bad one depending on the situation. The most important thing, however, is that you know what you’re up against. By having all the right questions prepared, you can minimize the likelihood of making a financial and lifestyle choice that you’ll come to regret, later on. Since this is a major financial choice (one of the biggest that you’ll ever make), no amount of research can ever be considered as too much.