Taking the plunge into the property market for the first time? Here are six things you need to know when buying an apartment.
Land is becoming scarce and people want to live closer to the CBD. It’s not surprising that more than a million Australians live in apartments and they’re particularly popular with young home buyers. If you’re on the verge of buying your first property, it’s well worth researching the current housing market, especially apartment pricing. Here’s a list of other important things to consider.
1. All things strata
When you purchase an apartment, townhouse or unit, you’ll generally be purchasing your share in a strata title. Ownership includes your individual lot – your actual unit – plus part of the common areas and building you share. Common areas include car parks, entrances and gardens, and any recreational facilities such as pools and tennis courts.
Part of belonging to a strata title means having responsibilities to others, including the owners’ corporation, which manages and maintains the building.
2. Your financial responsibilities
As a lot owner, you’ll need to pay levies, a yearly fee, usually split into quarterly payments, covering ongoing costs and building maintenance, plus any other financial commitments. The money is divided between two accounts – the administrative fund that covers day-to-day costs and the sinking fund used for long-term expenses.
Keep these costs in mind when you’re coming up with your own budget for council rates, utilities, mortgage and contents insurance.
3. Rights and responsibilities as an owner
As a lot owner, there are a number of rights and responsibilities you should comply with. For example, you must uphold all by-laws, behave in a fitting manner that will not offend or interfere with your neighbours and get permission for renovations. Of course, you have the right to live peacefully in your own home and your neighbours are expected to abide by these codes too. Rights and responsibilities also relate to noise disturbances and whether or not you can have a pet in the house.
When you’re deciding on the perfect place you should be taking a very close look at the individual lot in question. You’ll need to hire a professional for a pre-purchase property inspection of the whole building, including a pre-purchase pest inspection. You should also request a strata inspection report and the real estate agent can probably provide this. If there are problems with the building, it’s likely you’ll be hit with heavy strata fees to meet associated costs, so it’s best to know this upfront.
5. Complaints and disputes
There are lots of people involved in decision-making in strata schemes and it’s not unusual for disputes to arise – from people not following rules in the car park to excessive noise from units. Disputes can often be sorted out simply by having a chat to the neighbour in question. And if this fails, the executive committee of the owners’ corporation can step in.
6. Each building is different
Ultimately, each strata building will be different with pros and cons to every property you find. While it’s great to have someone else deal with the maintenance of a building, it means there are many opinions to be heard. And while having neighbours around to help look after things can be a benefit, this can be outweighed if they’re noisy or antisocial.
Have you recently purchased your first apartment? Share your comments below.