5 things you must know before buying an apartment
More and more investors are adding apartments to their portfolios, but you need to make sure you know what you're getting into before you sign the dotted line.
Blogger: Andrew Staehr, Archers Body Corporate Management
For many investors the world of strata presents an abundance of opportunities and, as the trend towards community living grows faster than ever, there are more and more properties to choose from. While buying into a strata scheme can be a tricky process to navigate, if you do your research early and know what factors to consider when searching for a property, you can avoid issues that may affect the way you use your property in the future.
The first thing you need to know about is by-laws – many bodies corporate have specific by-laws in place which can restrict an owner from activities that might have been taken for granted in a house. This includes but is not limited to: changing the appearance of their lot, displaying washing on balconies and keeping a pet. This is something to keep in mind when you consider what kind of tenants you want to attract.
As an investor and unit owner you are automatically a member of the body corporate and have the opportunity to have your say on the decisions the body corporate makes.
Investing in strata living can be fantastic – you just have to find the scheme that’s right for you and the future of your investment. Consider these tips when you begin your search:
1. Investigate the body corporate’s records to determine whether the complex is right for you
The key things to look out for are disputes. Take a look to see if there are regular disputes within the complex and consider how the body corporate enforces the by-laws. Some schemes will issue breach notices for minor infringements while others will go with more friendly communication – put yourself in your future tenant’s position and make sure you are comfortable with the process in your chosen scheme.
2. Determine whether the property is maintained to a high standard
If a property is well maintained, you can bet that the body corporate committee is on the ball. Most maintenance of the common areas and of the outside of the building will need to be coordinated and approved by the body corporate so it is important that they are proactive. If the property is not being maintained well, you should consider its ability to attract tenants and the financial implications that may arise for you in the future.
3. Does the complex employ a caretaker?
Some complexes include caretakers and cleaners responsible for keeping daily and weekly maintenance and general cleanliness of a property. They are employed by the body corporate and as an owner your fees will contribute to their salary. It’s worth considering if you notice any cleanliness issues with the property.
4. Find out if the complex includes holiday letting, commercial and/or retail letting
A lot of strata living environments are mixed-use, which means they offer residential as well as holiday letting, commercial and/or retail letting. This is something to consider if you intend to rent your property, as this may attract a wider range of tenants and increase rental opportunities throughout various seasons.
5. Does the body corporate take compliance seriously?
The wellbeing of all residents should be the focus of the body corporate. Ensure the building takes compliance seriously and is prepared for all situations. Bodies corporate should have current Workplace Health and Safety and Fire Compliance documents on file – always ask to see these.
