WA Why is there such a big difference in outgoings between WA and VIC?

Discussion in 'Where to Buy' started by DrunkSailor, 4th Jan, 2018.

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  1. DrunkSailor

    DrunkSailor Well-Known Member

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    I'm looking at old apartments in inner Melbourne suburbs and the strata fees in a lot of areas are around 1200 per year + council rates are 1000 per year. I'm from Perth so I'm also considering buying in Vic Park or Wembley but the outgoings are much more expensive than Melbourne. Minimum strata fees are 2000k per year + council rates of 1700 per year. The complexes look to be the same age as well so nothing to do with condition.

    I don't get why Perth strata and council rates are so high. It's one of the main things turning me off buying in Perth.
     
  2. SOP

    SOP Active Member

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    Perth rates are based on a Gross Rental Value while Vic is a Capital Improved Value. Also councils in Perth can apply a minimum rate.

    Basically this means lower value properties have a higher rates apportionment in Perth
     
    Karlos1234 likes this.
  3. sanj

    sanj Well-Known Member Premium Member

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    I'd be concerned if a strata for oldish apartments was only $1200/yr. How can that be stretched to cover a competent strata manager, ongoing regular services be it bin collection, whatever, common area gardening etc, sufficient and comprehensive insurance, sinking fund for when the unexpected occure or simply to be able to maintain the property when the need arises etc

    $300/quarter seems low unless there has been a fair amount of maintenance work done recenrlt and there's nothing of significance planned for a while
     
  4. DrunkSailor

    DrunkSailor Well-Known Member

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    300 per quarter is very common in Melbourne especially western suburbs. I've even come across some that are 200-250 per quarter when the complex is small such as 8 units. My previous apartment which was 12km west of the CBD was 1200per year for strata and 800 per year for council rates. Water was 400 per year. So 2400 total. This is why I don't understand why Perth outgoings are so expensive. Maybe they save money on energy bills? Energy companies are privatized in Melbourne and everyone complains about the costs.

    In regards to maintenance, I've never heard and issue with management due to low strata costs. Most people seek out the low strata units not feel skeptical about them.
     
  5. SOP

    SOP Active Member

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    Dont forget additional property management fees in WA. They charge additional for everything.
     
  6. MTR

    MTR Well-Known Member

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    On the flip side stamp duty is cheaper than Melb, I think Melb is around 6%
     
  7. sanj

    sanj Well-Known Member Premium Member

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    I get what you're saying, to use your example though, 200 per quarter would mean total strata fees for complex of of $6400/yr.

    I just don't see how that would sufficiently pay for everything I listed, unless there was almost zero soft landscaping, almost zero water bills, only LEDs for common areas, no pedestrian or vehicle gate or car ports or anything that either moves or would weather over time and had a strata manager who knew what they were doing and also was willing to work for not a lot.

    Appropriate insurance alone for 8 units that would cover all costs in event of a catastrophic event would be a good chunk of that $6400 and you wouldn't want zero sinking fund.

    Happy to be shown otherwise btw, IM just theorising so could be entirely wrong
     
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  8. JL1

    JL1 Well-Known Member

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    I have an older Perth townhouse, one of 10. our strata is 275/qtr (11k total). Its enough to cover grounds keeping, general maintenance (broken tiles etc.), communal gas and water, and usually there is not much left at the end of it, a few k at best.

    Our strata is managed by one of the owners (they are experienced, actively negotiate better deals for bills etc.) and we have very strong relationships with our contractors who give us great rates, so i can't see how anyone could run a tighter ship than we do. We have enough in the reserve fund to cover "medium" scale unexpected events (eg. the communal hot water boiler was recently replaced out of reserve), but if for example we found termites in the roof or something more significant, we are all out of pocket 4 figures immediately. This can quickly get very difficult as some owners may not want to or be able to afford to chip in, or they may blame certain other owners, and generally is a situation that many would try to avoid. I have a friend who has a unit in a block of 40, and they actively maintain a $100k reserve in order to avoid such situations. This means they generally have a "reserve fund" top-up payment on their strata which can fluctuate year on year based on their AGM agreements.

    Not saying that your finds in Melbourne are disasters, but Sanj is on the money here. Seriously question what is actually being done for such a low strata cost. Check what the reserve is at, ask for minutes of the last 2 or 3 AGM's and look for known issues. See if you can suss out the other owners, because especially if they're investors, they may not be happy about chipping in when things go wrong.