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Thinking about buying a strata title unit

Discussion in 'General Property Chat' started by Irosh Bandara, 2nd Sep, 2015.

  1. Irosh Bandara

    Irosh Bandara New Member

    18th Jun, 2015
    What are the differences between buying strata title unit vs. independent title unit? which type good for an investment property.

  2. Chilliblue

    Chilliblue Well-Known Member

    18th Jun, 2015
    What is Strata from NSW DOFT:
    A strata scheme is a building or collection of buildings that has been divided into ‘lots’. Lots can be individual units/apartments, townhouses or houses. When a person buys a lot, they own the individual lot and also share the ownership of common property with other lot owners. Common property generally includes things like gardens, external walls, roofs, driveways and stairwells.

    Strata living can provide a friendly community-style environment but differs from living in a freestanding house. Some activities may be more restricted – for example, where you can park your car or how you can renovate your lot. It is important for people to be aware of the responsibilities and obligations.

    Things to Consider:
    1. Strata levies: Be ready for shared expenses of the upkeep and maintenance of the common areas of the property and factor these costs into your calculations. Review the levies and understand if they are too high or low for the area and the reasons for the differences if any.

    2. Floor space: Lenders prefer properties over 50sqm so anything smaller may be difficult to attain a loan. Is the floor space what the rental market prefers, are there any changes that could do not make it better etc. Also review parking arrangements attached to the property.

    3. Size of the block: All things being equal, try to locate a property in smaller apartment blocks (up to 10 to 12 units). The larger the block the more lot owners to deal with.

    4. Old versus new: You need to understand and balance age, looks and practicality between old and new blocks. Newer apartments may be better for depreciation but an older block may be smaller, larger and still return a similar rent to a new one.

    5. Local Factors: Take a look around the area and see what is happening. Are there more unit blocks being built that could reduce demand for the property that you are looking at. Where is public transports, what facilities are locally available. What does the market want. Learn and understand these.

    6. By-laws: This is the rules of dos and don’ts, cans and cant’s for all unit owners and you should know and understand them. Every strata plan complies with a basic set of by laws but they may have adopted their own such as pet exclusion so always check before you buy and make sure you provide a copy to your tenant.

    7. Facilities: Heated pools, gyms, saunas, spas and even elevators will add extra $$ to your strata levies but not always to your rental return. So check the market.

    8. Strata inspection report: Order one to understand what exactly are you buying and understand the management history of the entire lot. You can do it yourself or arrange someone to do it for you at a cost.

    Independent living is simply any housing arrangement designed exclusively for seniors, generally those aged 55 and over. Housing varies widely, from apartment-style living to freestanding homes. In general, the housing is friendlier to older adults, often being more compact, with easier navigation and no maintenance or yard work to worry about.

    While residents live independently, most communities offer amenities, activities, and services. Often, recreational centers or clubhouses are available on site to give seniors the opportunity to connect with peers and participate in community activities, such as arts and crafts, holiday gatherings, continuing education classes, or movie nights. Independent living facilities may also offer facilities such as a swimming pool, fitness center, tennis courts, even a golf course or other clubs and interest groups. Other services offered in independent living may include onsite spas, beauty and barber salons, daily meals, and basic housekeeping and laundry services.

    Since independent living facilities are aimed at older adults who need little or no assistance with activities of daily living, most do not offer medical care or nursing staff. As with regular housing, though, you can hire in-home help separately as required.
    Irosh Bandara, HUGH72 and Leo2413 like this.