Hi Everyone. I'm new to property in general and am about to launch my investing journey. Due to some financial constraints I'm looking to buy a townhouse first up. Would love if I could get some advice on what to watch out for when buying a strata titled property. I've done a mountain of research but am still a bit nervous as there are always traps to look out for. Also, I've had some conflicting advice on whose name to put the property mostly under. Is it better to do a larger share under the lower earners name or the higher earners name? Any advice is welcomed, would love any tips you might have on the above and possibly negotiating price from other experienced investors. Thanks.
Get a copy of the AGM report and look at the issues previously raised and when these issues are due to be rectified. Sometimes the AGM agrees to spend the money later in the year and this is when the owner decides to sell it (just before the expenses kick in and strata increases). Secondly, find out how much they have in the sinking fund. In terms of whose name you should put the property in - you really need to get this advice from your Accountant. There are negative gearing implications but also other future taxes such as CGT. Also consider the benefits of having the properties in single names rather than joint names. From a future servicing perspective it is better to have a property in single names. The whole 99/1 thing that a lot of people do just kills their future servicing/borrowing capacity.
Introduce yourself with the neighbours. Having a chat with them could reveal some "off the books " issues that haven't officially reared their head. This could be anything from a new troublesome neighbour or building cracks that haven't been investigated.
Where are you looking to buy? Some areas of Sydney are saturated with new properties and both prices and rents are being heavily discounted. It is not unusual to find a tenant moving out who was paying $600 and then 3 months later a tenant is finally found for $100 a week less.
I would add to the other great posts: use your eyes and walk around the common areas? Is the common property well maintained? Are there water stains on ceilings? Are the gardens maintained and the lawns mowed? If there are problems in the general areas that you can see, there might be non-financial issues on the body corporate, such as inability to agree or make decisions.
