Buying a Strata Title Property: Is it a Good Investment, or a Risk?
When purchasing property, the title is where you’ll find the key details about what you’re actually buying and any conditions to be aware of. If you’re considering an apartment, unit, or townhouse, there’s a good chance it has a strata title. Understanding what this means for you as a property owner is essential. Let’s break it down.
What is a strata title?
Every property has a title, and a strata title is a specific type that’s common in Australia, particularly for units, apartments, and townhouses. It applies to properties with shared spaces and facilities.
Did you know? The concept of strata titles originated in Australia. This innovative property scheme has been so successful that it’s been adopted in many countries around the world.
Owning your ‘lot’ - plus more
When you purchase a strata-titled property, you don’t just own your individual unit (or ‘lot’) - you also share ownership of the building’s common areas.
Your lot includes the internal walls, ceilings, fixtures, flooring, airspace, and any courtyard or balcony that’s part of your property. Beyond that, you share responsibility for common property, such as:
Driveways and parking areas
Gardens
Lifts and stairwells
External walls and the building’s roof
In short, you own part of a larger dwelling rather than a freestanding home.
Sharing costs and maintenance
With strata ownership, you’ll likely contribute levies to an owners’ corporation (sometimes called a body corporate). These levies fund the maintenance and upkeep of common property, so costs are shared among all owners in the strata scheme.
Concerned about disputes? Most owners’ corporations have clear rules and processes for decision-making and conflict resolution. It’s a good idea to review these rules before purchasing to ensure they align with your expectations.
One added perk: lower insurance costs. Many maintenance and repair costs are covered by a sinking fund managed by the owners’ corporation, reducing the need for separate insurance policies.
Why invest in strata-titled property?
Strata-titled properties can be a smart addition to your investment portfolio or a practical choice for a residence. While some buyers hesitate due to unfamiliarity, this can create opportunities to secure valuable properties.
Better still, strata ownership doesn’t impact rental yield, making these properties a solid long-term investment.
Frequently asked questions
Can I Renovate?
Yes, you can renovate your strata property, provided you follow the owners’ corporation rules. Typically, you’ll need approval from the majority of owners for any significant changes.Will There Be Ongoing Expenses?
Yes, you’ll likely pay annual strata fees, but these cover shared maintenance and are often comparable to what you’d spend maintaining a standalone property.How Much Will Strata Fees Be?
This varies. It’s important to understand what the fees cover. For instance, at Providence, we only recommend strata properties where fees align with the amenities provided.What Should I Consider Before Purchasing?
Do your due diligence. Investigate:The levies you’ll need to pay
Any planned or ongoing works
By-laws that could affect your lifestyle, such as rules on parking or noise
Strata-titled properties offer a unique blend of individual ownership and shared responsibility, making them an excellent option for investors and homeowners alike. By understanding the ins and outs, you’ll be well-equipped to make an informed decision.
At Providence, we don’t just find properties – we uncover opportunities. By blending decades of experience with rigorous research, we empower our clients to make confident, informed decisions. Ready to start your property investment journey? Let’s find the right opportunity for you.
