Like any property purchase, it’s essential you do the math before you buy an apartment or condo so you’re certain you can afford the mortgage repayments and additional strata costs.
The body corporate fees – also called levies – are a mandatory part of strata living and a major consideration when purchasing an apartment.
Every apartment owner must pay these fees as a contribution to the maintenance of the building and its amenities.
The size of the fees is determined by the body corporate that manages the building. They are larger for developments that have features such as a swimming pool, manicured gardens, elevators and gym facilities.
And while apartments are generally more affordable than houses because there’s no land component, strata fees can be more expensive than the taxes a house owner might pay each quarter.
If you’re thinking of buying an apartment right now, or upgrading, this is a great time to make your move. The market is strong at the moment, indicating the potential long-term investment value of these properties.
Here is a list of questions to ask related to strata fees when you are hunting for your first or next apartment or condo.
- Check if capital improvements are part of the fees – Find out if there are capital costs coming up that you have to meet. Usually, the cost of maintenance and improvements of common areas will be a cost. And even if you don’t want them, your neighbors can vote for them to go ahead making you obliged to pay.
- Hidden cost – Ask if building insurance is included in the levies, or whether this is a fee that you will have to pay separately with your neighbors.
- How good is the owners’ corporation? – Ask the selling agent to give you a picture of their performance and priorities. Further, you can ask to see the minutes of previous meetings to satisfy yourself about their competence.
- Other key questions –
- What are the annual owners corporation fees?
- Does the corporation have a maintenance fund, and what’s the mandatory annual contribution?
- Does the owners’ corporation carry any debt, and what are your responsibilities for that debt?