How to choose an apartment wisely and why low levies can be a false economy

Sometimes when pensioners or investors dominate the ownership of a building or complex we see historical pressure to keep strata levies low. The discretionary portion of the levy is the sinking fund contribution, so when building issues arise, or upgrades are required, there is no money in the pot.  What happens next? Either the issues are ignored, the building begins to look shabby, or a special levy is struck. And, if you are interested in capital growth, all these outcomes can negatively impact the value of a unit or townhouse. So how to choose an apartment wisely?

It is now mandatory for owners’ corporations to undertake a 10-year maintenance plan and levy forecast. Those buildings with low levies will face sharp rises if the recommendations in their report are adopted. Those buildings that have been responsible with their financial management and avoided the temptation to keep levies too low will see much more modest increases.

Further reading:

5 Things To Look For When Choosing An Apartment

What are the risks of buying off the plan?

Why pre-purchase property inspections are so important – 5 questions to ask your building inspector

Published:-  12 June 2009


Please note:

Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.

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