When purchasing a property, especially an apartment, townhouse, or unit, it’s essential to factor in ongoing costs beyond just your mortgage repayments. One significant expense to be aware of is strata fees, which contribute to the maintenance and management of shared spaces within the complex.
If you’re planning to buy into a strata scheme, understanding these fees will help you plan your budget effectively and prevent any financial surprises down the line.
Strata fees are generally divided into three main categories:
Several factors contribute to the amount you’ll pay in strata fees:
• Building Size and Age – Larger or older buildings typically incur higher maintenance costs.
• Amenities and Services – Properties with additional features like pools, gyms, lifts, and security services usually have higher fees.
• Location – Strata fees can vary depending on the local cost of services and council regulations.
• Financial Health of the Strata Scheme – If the building’s sinking fund is underfunded, owners might face special levies for repairs and upkeep.
When evaluating affordability, many buyers focus primarily on mortgage repayments, but strata fees can significantly add to your monthly expenses. While a lower strata levy might seem appealing, it could be a red flag. If the levy is too low, it may indicate that there aren’t enough funds set aside for future maintenance, leading to the possibility of unexpected special levies.
Tip: Always review the strata’s financial records before making a purchase. This will give you insight into the building’s financial health and any potential future costs.
• Request a Strata Report – This will provide valuable information about the financial stability of the scheme, upcoming maintenance needs, and any potential special levies.
• Compare Fees Across Properties – Different buildings offer various amenities, which means fee structures can differ greatly. Make sure to compare them.
• Include Strata Fees in Your Budget – When calculating what you can afford, be sure to factor in strata fees along with your mortgage repayments, council rates, and other living costs.
Understanding all the costs involved in purchasing a property can feel overwhelming, but it’s essential. If you’re considering a strata property, I can help you navigate your options and secure a loan that suits your budget and long-term plans.
Contact your local 1st Street Mortgage Broker today, and let’s take the next step toward securing your dream home!
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