If you’ve been debating the purchase of a unit, townhouse or apartment, you’ve probably come across strata fees – but what exactly are they, and is it worth it?
Did you know that around 1.3 million Australians now live in an apartment? Considering the value of land, our demand for quality of life and changing family dynamics, it’s no surprise that a growing number of people are choosing to sacrifice space in favour of having access to more amenities.
Owning an apartment essentially frees you from a lot of the responsibilities of owning a standalone property. Gone are the days of tending to the gardens, building maintenance and even cleaning the pool, as there’s often on-site managers or hired help to tackle this for you. Unfortunately, this does come at a price.
When you own an apartment or essentially any dwelling with shared amenities, strata fees cover all the expenses incurred in managing and maintaining a strata property. Despite the potential benefits, there are many rules and regulations that owner occupiers and investors should consider before committing to such a property.
Unpacking How Strata Fees Work
A strata scheme essentially means that you share ownership of a building with other tenants while owning your own apartment. Together, people who make up the tenants in a strata building are called the owners corporation, who share the responsibility of the property and the upkeep of the communal areas they use. Investors and homebuyers should always be mindful that purchasing an apartment is not just about the property itself, but also the fact that you’re buying into an owners corporation as well.
The owners corporation of a strata property runs the AGM, sets the budget, collects the levies, maintains the common property, renews the building insurance (including public liability and associated insurances), enters into services contracts and conducts all other facets that relate to the building parts that don’t relate to an individual apartment.
As such, a building that is under a strata scheme is called the body corporate. As an owner of a portion of the building, you must contribute to the body corporate regardless of whether you are an owner occupier or an investor, and these contributions are called strata fees – or essentially what pays for the overall management and maintenance of the apartment complex.
Depending on the nature of the property and its amenities, strata fees can vary. The location, the age and price of the property will determine how much strata you’d see yourself contributing, and the more communal amenities you have (think swimming pools, elevators and gyms), the higher the strata fees will usually be. As such, strata fees can cost anywhere between $550 and $2,500 per quarter.
Thankfully, strata fees are typically a tax deductible expense, which reduces their inconvenience in the eyes of property investors looking to negatively gear their portfolio. While the rules for strata fees and relevant bylaws do vary between each state and territory in Australia, a few key things to identify in the fine print include rules tied to noise regulations, parking arrangements, any changes to the common property and the allowance of pets. By outlining rules that every contributor can agree on, living on shared property becomes easier and can save you the trouble of any disputes between tenants.
Should you be looking to sell your home or purchase a new one, enlisting the services of a free property advisor like ESPA can often be a game changer. As an example, your advisor would likely research the property, local agents, check the zoning, evaluate market conditions and communicate clearly with you regarding all of your options – but where do you find one?
Take The Stress Out Of Selling Property
As a completely free service, Emergency Services Property Advisors provide property advisor services to Police, Fire, Ambulance and S.E.S personnel and their families right across Victoria.
Luke and the team at ESPA are passionate about providing support to some of Australia’s most valued public servants. Along with key industry insights, ESPA also works with a broad range of service providers linked to the real estate industry such as conveyancers, trades, legal practitioners and mortgage brokers.
If you are an emergency services worker looking to potentially buy or sell property in the future, please get in touch with Emergency Services Property Advisors today to discuss how we can turn your real estate dreams into reality, or call Luke directly on 0414 757 705.