Strata fees include building insurance that has gone through the roof as home insurance. Sure there are some dodgy buildings and it is buyer beware to read through the strata meeting minutes.
Yeah sure, and OC managers usually get massive kickbacks form the insurance brokers (who are themselves middle men). Or better yet, own the brokerage as well. Â
Don't let yourself be convinced that the name on the invoices means that money isn't flowing in different directionsÂ
No way do they all declare at AGMs, for most it is hidden at the back of an agreement that barely any resident reads. There may only be a few insurers by there are tons of brokerages taking commission off you.
Someone forced to buy an apartment to live in because they canât afford a house now shouldnât have to pay double or sometimes triple the rates that homeowners do who own 10x the amount land. Even old apartments in Perth have OC fees of 5kpa and the water/land rates are similar to a house so you ended paying 5k per year extra for the privilege of living in a shoebox. why would people want to adopt high density living with those kinds of arrangements? If you buy a 70sqm apartment with no facilities youâll pay 8.5k per year in outgoings but if you buy a 4x2 on 700sqm block of land you only pay 3.5k a year outgoings.
Agree with OP re: outrageous strata costs, but thatâs not really a fair comparison if youâre not including house maintenance, minor repairs and insurance.
My household rates are $1.6k/year, but Iâve paid almost $8k in general repairs in the past year, plus I do my own landscaping etc.
In some ways I miss my old apartment life where I worried about almost nothing.
Thatâs your choice to buy a property in disrepair, I could easily spend triple that updating an old apartment.
Just like we have a luxury car tax for people who want to own a vehicle beyond necessity we need to do the same for houses. The government taxes everything to high heaven except housing greed because itâs the national gravy train.
Why should only a lucky few have the privilege of owning a big house that cost nothing in land rates while everyone else can only afford a shoebox that bleeds money? Itâd be one thing if everyone could afford a house but now thatâs it become a rare privilege it needs to be taxed.
Rates are based on the size of land area, and the cost is shared across all dwellings on the land. So for sure one house owner on a large block of land is paying more in rates than a unit owner on same size block in same area. The high outgoings for apartment owners are nothing to do with rates, and everything to do with strata dodginess, which seems to be a big problem.
I agree. Because of the poorest construction quality they can get away with, sometimes it feels like living in a fucking sharehouse - you hear them flushing the toilet or having sex or laughing or screaming. Not to mention steps and dragging chairs.
So you pay so much money on top of your mortgage on outgoings but have none of the benefits and privacy and tranquillity of living in a house.
My advice - look for a small size double brick building with up to 12 apartments, with no lifts and cheap oc. Look for a corner, top floor position.
Instead of wasting $$$$ more on OC than what you should be paying, spend that money on yourself or your family.
So the issue is expectations. Punters want all the whistles and bells but don't realise that it costs money to provide.
Sheez, ensuites, extra bathrooms or lux kitchens, are expensive parts of a building.
Strata levies are expensive because someone else is paying for the insurance, upkeep, lawns etc which you have no choice about doing.
People sitting on 700sqm blocks should be paying a lot more than 3.5k per year and people who make the compromise and opt for a 75sqm apartment should pay the least amount of outgoings. We are disincentivising a smaller foot print. The government needs to flip the script and make it more costly the more land you own.
I live in an apartment in Prahran and only pay $3k a year in strata which includes insurance. I bloody love it! We have people to take out our bins weekly, a gardener comes once a week, people clean out our gutters if there is a burst pipe in the garden or a light out, it is fixed before I even know about it. I live in a mid century block of only 9 units, all double brick with large rooms and walk in robes. My neighbours are all also females in their 30âs and awesome. We have 27k in the maintenance fund for emergencies, Itâs great! I donât have to spend anytime maintaining my property and can just enjoy my life.
No lift, movie theatre, pool, sauna, gym or car stacker to service. I think these gimmicky add ons is what costs owners crazy money. I doubt anyone uses these services enough to justify the additional $8k-12k a year.
A home owner may only pay 3.5k in insurance but when something happens (which it will), say the roof needs replacing, a pipe bursts, fence falls down in the wind, roots grow into plumbing or gutters need cleaning, they will need to cough up 100% of the repairs/works. Not to mention the mental load of coordinating the trades and taking time off work to be home.
Obviously there is more capital growth in stand alone houses, but for some people lifestyle and not having to spend most weekends fixing up their house is ideal. Living in an apartment and investing in ETFâs is a happy medium IMO. You get all the financial growth benefits without having the huge maintenance costs of housing eating away at the profits. There are also massive exit costs with housing as an investment. Itâs always good to have diversity in where you invest your money.
>for some people lifestyle and not having to spend most weekends fixing up their house is ideal.
This is me. Costs me $5K a year to own my apartment. Downsized from a house. I don't have to mow. I have a pool someone else looks after. I have a gym someone else maintains. I have a BBQ area someone else keeps clean and maintained.
Because I live in the city, everything is in walking distance. I only need to drive to visit friends who live in the burbs. I filled up my tank 3 times last year. If you live in a house, you need to get into the car multiple times a day to go some where.
To find a 700sqm block these days you'd have to be on the edge of Podunk, with long commute to city and few services. Whereas those 75sqm apartments are typically more centrally located in areas with lots of amenities. Pick your poison. Everything is a trade off, and everyone ends up paying in one way or another.
You love a bit of hyperbole, huh? Shit is expensive and sure thereâs people out there making a lot of quick bucks but buildings are way more complicated to maintain than your average punter assumes. Youâve also breezed past the outgoings that are part of your strata levies that would be paid directly by a homeowner - water consumption, building insurance are the big ones, so knock 2-3k per year off your levy to account for those costs. How does it look now?
This is the bit most people don't grasp - how many services are required to 'run' a building but also to keep it compliant.
Common area electricity/water/gas, lift maintenance, car stacker maintenance, weekly bin pick up, twice weekly cleaning, yearly compliance checks, fire system testing, sprinkler testing, gutter cleaning, solar panel cleaning, etc etc
There are absolutely shonky strata managers (we booted the ones the builder saddled us with after 1 year), but lots of people don't seem to bother understanding what their fees actually cover.
The best ones are those that think the manager gets paid the whole budget, then just pays the building costs out of the goodness of their hearts. Thereâs no doubt our society has a grossly deficient understanding of how strata systems work, and the system has some major flaws, but itâs here to stay and become the only housing option for a rapidly increasing part of the population.
Lol. My current favorite building barney is the boomer arguing that it's fair for them to use one of the (very limited) visitors parking spaces as a private second spot for their unit, cause 'i pay fees ya know'.
Since when is water consumption included in strata fees? Have always paid for water services + consumption in an apartment.
Additionally, building insurance does not cover contents so you still have to get content insurance
I guess home insurance and general maintenance are covered as part of strata, however often if there is a big maintenance issue it comes out of extra levies that the owners have to pay depending on how much money is left over.
Unless you have a water meter for every apartment, how do you think the authority can charge you for your consumption? Granted there are a small portion of buildings that do have individual meters, but if yours doesnât then the bill you receive is just rates (ie a connection charge)
Yes same amount each quarter for a year.
Edit: I realise now that you may not have been disputing the commenter above's "Since when is water consumption included in strata fees"
No, I was disputing the previous commenterâs point. Water consumption is typically paid by the BC because there isnât a meter for each unit. There are some exceptions.
The bill you are paying is water rates I.e. the connection to the water and sewage network
Don't know where you are but in older buildings in Melbourne with no separate meters, the connection, usage and sewerage is charged by dividing total amongst amount of units.
We've been paying this for over a decade for our 2 tenants.
We have one water meter for the whole building and each apartment pays a percentage. Eg, there are 18 units in my building and my water bill is calculated at 5.56% of the total water usage for the building. Our body corp fees do not pay for water.
The apartment I live in was built in the 90s and that's exactly what happens. Every apartment has a separate water meter. It also ensures that if there's an issue localised to one apartment they can turn that off and not affect the whole building. Same with electricity and Gas.
There may be some other apartments that don't have this set up
It is the overwhelming majority, at least in my area. Each apartment has a separate isolation valve independent of the water meter. There was a brief period that new builds had individual meters but the water authority complained about having to read them all, so that stopped pretty quickly.
For my scheme, insurance (for the building, public liability, etc.) is the big ticket item, and there's water charges for the common property (e.g. for gardening).
You are missing the nice fire checks completed by the same company charging extra and the insurance that is 40% higher with a finders fee for using the strata company's own off shoot.
There is a lot of dodgy shit strata company's are doing increasing fees. It was all aired a few weeks ago on the ABC and as of yet per normal no government wants to regulate the industry because self regulation of things like conflict or interest are working so well.
Yeah im in a small strata building, 8 units, no common property or facilities excepting foyer, lift, bin room. The fixed admin costs are what makes strata a joke here in Aus...namely:
- Building Insurance
- Fire checks, compliance and constant replacements / maintenance of equipment that mysteriously deteriorates even tho its not used
- Lift maintenance
Ive seen the lower costs in europe as well. I have tried multiple times to get quotes in these areas. Theres some kind of collusion going on as there's limited suppliers, never any competition in quoting. I swear they know this and just gouge the costs.
We could only get 1 Insurance provider to quote on our building for example and we are completely at their mercy as a result. Our ins premiums alone have gone from 13k in 2022 to 23k yr in 2024.
When we do have maintenance such as cleaning, electrical, general small maintenance surprise surprise u get competitive quotes. But theres something shady going on with these fixed costs and lack of competition and its infuriating.
Getting on the committee was easy. We were the only 5 to show up to the AGM.
From there, we kicked out the strata company the builder appointed, the day the contract ended and hired our own who didn't take kick backs from service providers.
Iâm in a set of 3 townhouses, pretty nice build, most separated by garages in between, private and we love it.
Our annual fees are $1900 - which also covers our building insurance (which is good coverage). Weâd be paying $1200 plus anyway for insurance, so thereâs some left over for the fund.
Some place with elevators, pools, underground parking, gyms, etc are much more expensive. Find the right place for your budget.
I agree that some of the strata people involved are incompetent and should not be paid what they are. But we like our set up.
Mine has been quite good over the years all things considered. I live in a small 70s built unit block of only nine. Itâs not much more than a really big house and not much to go wrong. These new âBorg Cubeâ developments are far too complex and cost a fortune to run. It sounds like people donât do any research into what theyâre buying into, basics like strata, building and pest report. I think people get carried away with the bling, stainless steel appliances, gyms, pools and other things. Doesnât mean much if the building itself is shoddy!
If you put aside cash to put into ETFs doesn't that mean you would have to borrow more to cover the mortgage? Then you have to rely on the fact that your ETFS will outperform the interest on the extra mortgage, which is not always guaranteed.
We need to encourage more medium-high density housing in areas with infrastructure, not urban sprawl with poor infrastructure further and further out from the cities. High OC fees so not help with this.
Yep. I lived in a strata block in inner SE Melbourne where we paid $10k per annum in fees. Actually outrageous. No lifts, no gym, ancient old building too. The committee did fuck all. I was stoked when I sold the place! And sadly it was an enormous deterrent for so many buyers. We had buyers emailing the agent being like âsurely this figure is a typoâ. Nope.
I'm in Melbourne as well, not far from you probably (also inner SE).
I'm here to do a people a favour - do not buy an apartment where you will pay that much in OC. Because you'll have a hard time selling it if you are unhappy (and you will be).
The first thing an informed buyer looks at is not pathetic cosmetic work they did to sell, but how much is OC. When they hear 10,000 (+ council rates, water rates etc) they run away.
Unless they are easily taken advantage of. Go ahead, finance a rort if you don't care about your money.
Also, it all goes on "maintenance" and insurance. If they need anything done, they have to raise money. Like, I've read a couple of contracts where cladding needs to be removed, and owners need to pay millions $$$$$$$$.
Don't go to inspect before finding out what the oc is. Save yourself some time, have respect for yourself. If the agenties to you and says "we are still waiting for that information", tell them you'll come to inspect once they got it.
Buy in an old style, double brick low rise where most people are owners, preferably no lifts. Look also for top floor corner position.
I would never buy an apartment tbh, way too risky, better off putting that deposit into shares.
The horror stories of special levies or just skyrocketing stratas for other reasons, which you have no choice but to pay (because who's going to take it off your hands once this comes to light)
[https://www.theguardian.com/australia-news/2024/apr/21/completely-blindsided-new-owners-of-strata-properties-shocked-by-special-levies](https://www.theguardian.com/australia-news/2024/apr/21/completely-blindsided-new-owners-of-strata-properties-shocked-by-special-levies)
[https://www.smh.com.au/property/news/sydney-apartment-investors-fear-debt-trap-as-levies-skyrocket-20220126-p59rcd.html](https://www.smh.com.au/property/news/sydney-apartment-investors-fear-debt-trap-as-levies-skyrocket-20220126-p59rcd.html)
This is quite a strange post.
My strata committee (block of 10) is very friendly and we work closely with the strata manager to get good value for money in maintenance tasks.
There's no way I'd want to manage a building myself.
For our old unit it's like $400 a quarter and that includes building insurance and our little lawn gets mowed and hedges/trees trimmed. It really is a case of DYOR, some stratas are an absolute ripoff and some seem to offer okay value for money.
This post could not have come up at a more appropriate time. Iâm currently in the market for an apartment (first time buyer and yes it will be my main residence). Buying by myself so cannot afford a house unless I want to move to middle of nowhere. One of the apartments Iâm really really interested in has $7100 body corp p.a. The building has no gym, no pool, no bbq area, no garden, no car stacker etc. The building is just 9 years old so shouldnât be in any dire need of expensive repairs. From my understanding, most of the levy is going towards wages of a âbuilding managerâ. But what is being managed exactly when there are no communal facilities apart from lifts, utilities etc.?
I just downsized. Last year or two - *either* me spending two hours of my time each fortnight at a bare minimum mowing and trimming hedges, sweeping leaves, washing down possum poo or alternatively spending maybe $2500 a year on a gardener to do that per year.
Burst pipe in the back - $800 to make it safe. Quoted $4000 to pull up garden and reattach.
Huge rates bill because it's a crappy house but on a big block.
If I put in a lift it would be $2000 per year to have maintained.
Whatever the water usage component is
That's without considering the cost of maintaining a pool in either type of property.
My point being that one way or another the areas outside the front door need to be maintained..
Join the committee so you can be involved with the decisions. You may find that the expenses are justified, and if not you can do some research and make alternative suggestions. The OC is driven by other owners who also donât want to waste their money. Strata manager has to do what the OC says.
Most of the OC budget goes to trades. OC im in get 5+ quotes for work over 10000, tradies see a quote request from strata its going to come back triple the price, regardless of whether there's any 'dodgy kickback'.
Iâve only ever lived in a house so had no idea about them, but all the stuff I read on hear about strata/owners corp/body corp, I would NEVER buy a place that has any of these, thereâs enough rules and controlling factors over your life all-ready, to voluntarily sign up to these seems like madness!
So what's the alternative according to you? You do realise housing prices are criminal in this country. Housing is a pyramid scheme that props the economy.
Some people have only choice between renting forever (renting an apartment that is, and dealing with demonic real estate agents and poor quality), or buying an apartment.
More than 2/3 of Germans live in an apartment.
But they do not sponsor OC mafia and have much better quality of construction.
I'm the only owner occupier on commitee it sortve works in my favour as they consider me their eyes on the ground. They are not unreasonable aswel it's more the way strata rules work that is dog shit.
My biggest advice is watch out who they keep getting quotes from. They kept going to a big builder who over charged quotes, always had issues and I highly suspect Was paying kickbacks to strata managers firm
That's fine, you can pay your $50k share of a million dollar fix... lol.
Even small problems are costly with strata and you have nil control over the schedule or cost. Good luck!
Strata fees include building insurance that has gone through the roof as home insurance. Sure there are some dodgy buildings and it is buyer beware to read through the strata meeting minutes.
Exactly, the insurance is almost always the highest percentage of your fees.
Insurance companies are killing us all in every aspect including health!đ¤¨
Yeah sure, and OC managers usually get massive kickbacks form the insurance brokers (who are themselves middle men). Or better yet, own the brokerage as well.  Don't let yourself be convinced that the name on the invoices means that money isn't flowing in different directionsÂ
They get a commission and always declare that at the AGM. There are only 2 or 3 insurers to choose from for strata plans.
No way do they all declare at AGMs, for most it is hidden at the back of an agreement that barely any resident reads. There may only be a few insurers by there are tons of brokerages taking commission off you.
Someone forced to buy an apartment to live in because they canât afford a house now shouldnât have to pay double or sometimes triple the rates that homeowners do who own 10x the amount land. Even old apartments in Perth have OC fees of 5kpa and the water/land rates are similar to a house so you ended paying 5k per year extra for the privilege of living in a shoebox. why would people want to adopt high density living with those kinds of arrangements? If you buy a 70sqm apartment with no facilities youâll pay 8.5k per year in outgoings but if you buy a 4x2 on 700sqm block of land you only pay 3.5k a year outgoings.
Agree with OP re: outrageous strata costs, but thatâs not really a fair comparison if youâre not including house maintenance, minor repairs and insurance. My household rates are $1.6k/year, but Iâve paid almost $8k in general repairs in the past year, plus I do my own landscaping etc. In some ways I miss my old apartment life where I worried about almost nothing.
curious, but what are you repairing on 8k? Is this every year?
Thatâs your choice to buy a property in disrepair, I could easily spend triple that updating an old apartment. Just like we have a luxury car tax for people who want to own a vehicle beyond necessity we need to do the same for houses. The government taxes everything to high heaven except housing greed because itâs the national gravy train.
At least your name is accurate
Why should only a lucky few have the privilege of owning a big house that cost nothing in land rates while everyone else can only afford a shoebox that bleeds money? Itâd be one thing if everyone could afford a house but now thatâs it become a rare privilege it needs to be taxed.
Rates are based on the size of land area, and the cost is shared across all dwellings on the land. So for sure one house owner on a large block of land is paying more in rates than a unit owner on same size block in same area. The high outgoings for apartment owners are nothing to do with rates, and everything to do with strata dodginess, which seems to be a big problem.
I agree. Because of the poorest construction quality they can get away with, sometimes it feels like living in a fucking sharehouse - you hear them flushing the toilet or having sex or laughing or screaming. Not to mention steps and dragging chairs. So you pay so much money on top of your mortgage on outgoings but have none of the benefits and privacy and tranquillity of living in a house. My advice - look for a small size double brick building with up to 12 apartments, with no lifts and cheap oc. Look for a corner, top floor position. Instead of wasting $$$$ more on OC than what you should be paying, spend that money on yourself or your family.
So the issue is expectations. Punters want all the whistles and bells but don't realise that it costs money to provide. Sheez, ensuites, extra bathrooms or lux kitchens, are expensive parts of a building. Strata levies are expensive because someone else is paying for the insurance, upkeep, lawns etc which you have no choice about doing.
People sitting on 700sqm blocks should be paying a lot more than 3.5k per year and people who make the compromise and opt for a 75sqm apartment should pay the least amount of outgoings. We are disincentivising a smaller foot print. The government needs to flip the script and make it more costly the more land you own.
I live in an apartment in Prahran and only pay $3k a year in strata which includes insurance. I bloody love it! We have people to take out our bins weekly, a gardener comes once a week, people clean out our gutters if there is a burst pipe in the garden or a light out, it is fixed before I even know about it. I live in a mid century block of only 9 units, all double brick with large rooms and walk in robes. My neighbours are all also females in their 30âs and awesome. We have 27k in the maintenance fund for emergencies, Itâs great! I donât have to spend anytime maintaining my property and can just enjoy my life. No lift, movie theatre, pool, sauna, gym or car stacker to service. I think these gimmicky add ons is what costs owners crazy money. I doubt anyone uses these services enough to justify the additional $8k-12k a year. A home owner may only pay 3.5k in insurance but when something happens (which it will), say the roof needs replacing, a pipe bursts, fence falls down in the wind, roots grow into plumbing or gutters need cleaning, they will need to cough up 100% of the repairs/works. Not to mention the mental load of coordinating the trades and taking time off work to be home. Obviously there is more capital growth in stand alone houses, but for some people lifestyle and not having to spend most weekends fixing up their house is ideal. Living in an apartment and investing in ETFâs is a happy medium IMO. You get all the financial growth benefits without having the huge maintenance costs of housing eating away at the profits. There are also massive exit costs with housing as an investment. Itâs always good to have diversity in where you invest your money.
>for some people lifestyle and not having to spend most weekends fixing up their house is ideal. This is me. Costs me $5K a year to own my apartment. Downsized from a house. I don't have to mow. I have a pool someone else looks after. I have a gym someone else maintains. I have a BBQ area someone else keeps clean and maintained. Because I live in the city, everything is in walking distance. I only need to drive to visit friends who live in the burbs. I filled up my tank 3 times last year. If you live in a house, you need to get into the car multiple times a day to go some where.
To find a 700sqm block these days you'd have to be on the edge of Podunk, with long commute to city and few services. Whereas those 75sqm apartments are typically more centrally located in areas with lots of amenities. Pick your poison. Everything is a trade off, and everyone ends up paying in one way or another.
You love a bit of hyperbole, huh? Shit is expensive and sure thereâs people out there making a lot of quick bucks but buildings are way more complicated to maintain than your average punter assumes. Youâve also breezed past the outgoings that are part of your strata levies that would be paid directly by a homeowner - water consumption, building insurance are the big ones, so knock 2-3k per year off your levy to account for those costs. How does it look now?
This is the bit most people don't grasp - how many services are required to 'run' a building but also to keep it compliant. Common area electricity/water/gas, lift maintenance, car stacker maintenance, weekly bin pick up, twice weekly cleaning, yearly compliance checks, fire system testing, sprinkler testing, gutter cleaning, solar panel cleaning, etc etc There are absolutely shonky strata managers (we booted the ones the builder saddled us with after 1 year), but lots of people don't seem to bother understanding what their fees actually cover.
The best ones are those that think the manager gets paid the whole budget, then just pays the building costs out of the goodness of their hearts. Thereâs no doubt our society has a grossly deficient understanding of how strata systems work, and the system has some major flaws, but itâs here to stay and become the only housing option for a rapidly increasing part of the population.
Lol. My current favorite building barney is the boomer arguing that it's fair for them to use one of the (very limited) visitors parking spaces as a private second spot for their unit, cause 'i pay fees ya know'.
Since when is water consumption included in strata fees? Have always paid for water services + consumption in an apartment. Additionally, building insurance does not cover contents so you still have to get content insurance I guess home insurance and general maintenance are covered as part of strata, however often if there is a big maintenance issue it comes out of extra levies that the owners have to pay depending on how much money is left over.
Unless you have a water meter for every apartment, how do you think the authority can charge you for your consumption? Granted there are a small portion of buildings that do have individual meters, but if yours doesnât then the bill you receive is just rates (ie a connection charge)
I've paid Sydney Water directly for both of the apartments I've owned...? Definitely not rolled into the strata levy.
Same amount every bill?
Yes same amount each quarter for a year. Edit: I realise now that you may not have been disputing the commenter above's "Since when is water consumption included in strata fees"
No, I was disputing the previous commenterâs point. Water consumption is typically paid by the BC because there isnât a meter for each unit. There are some exceptions. The bill you are paying is water rates I.e. the connection to the water and sewage network
Don't know where you are but in older buildings in Melbourne with no separate meters, the connection, usage and sewerage is charged by dividing total amongst amount of units. We've been paying this for over a decade for our 2 tenants.
We have one water meter for the whole building and each apartment pays a percentage. Eg, there are 18 units in my building and my water bill is calculated at 5.56% of the total water usage for the building. Our body corp fees do not pay for water.
Exactly!
The apartment I live in was built in the 90s and that's exactly what happens. Every apartment has a separate water meter. It also ensures that if there's an issue localised to one apartment they can turn that off and not affect the whole building. Same with electricity and Gas. There may be some other apartments that don't have this set up
It is the overwhelming majority, at least in my area. Each apartment has a separate isolation valve independent of the water meter. There was a brief period that new builds had individual meters but the water authority complained about having to read them all, so that stopped pretty quickly.
Mine didnt have that. We just spent $70K putting in isolation valves in because the builder was that shit. And the complex only has one meter.
depends how the scheme is metered some schemes will raise a differential levy for water usage
For my scheme, insurance (for the building, public liability, etc.) is the big ticket item, and there's water charges for the common property (e.g. for gardening).
You are missing the nice fire checks completed by the same company charging extra and the insurance that is 40% higher with a finders fee for using the strata company's own off shoot. There is a lot of dodgy shit strata company's are doing increasing fees. It was all aired a few weeks ago on the ABC and as of yet per normal no government wants to regulate the industry because self regulation of things like conflict or interest are working so well.
Yeah im in a small strata building, 8 units, no common property or facilities excepting foyer, lift, bin room. The fixed admin costs are what makes strata a joke here in Aus...namely: - Building Insurance - Fire checks, compliance and constant replacements / maintenance of equipment that mysteriously deteriorates even tho its not used - Lift maintenance Ive seen the lower costs in europe as well. I have tried multiple times to get quotes in these areas. Theres some kind of collusion going on as there's limited suppliers, never any competition in quoting. I swear they know this and just gouge the costs. We could only get 1 Insurance provider to quote on our building for example and we are completely at their mercy as a result. Our ins premiums alone have gone from 13k in 2022 to 23k yr in 2024. When we do have maintenance such as cleaning, electrical, general small maintenance surprise surprise u get competitive quotes. But theres something shady going on with these fixed costs and lack of competition and its infuriating.
Never buy a unit where the developer has majority OC membership. Check first and run.
You can't compare rent in Germany with Australia. However, German workmanship is much better we all agree, a lot of dodgy tradies here.
Getting on the committee was easy. We were the only 5 to show up to the AGM. From there, we kicked out the strata company the builder appointed, the day the contract ended and hired our own who didn't take kick backs from service providers.
Thought all strata get kickbacks
Iâm in a set of 3 townhouses, pretty nice build, most separated by garages in between, private and we love it. Our annual fees are $1900 - which also covers our building insurance (which is good coverage). Weâd be paying $1200 plus anyway for insurance, so thereâs some left over for the fund. Some place with elevators, pools, underground parking, gyms, etc are much more expensive. Find the right place for your budget. I agree that some of the strata people involved are incompetent and should not be paid what they are. But we like our set up.
Mine has been quite good over the years all things considered. I live in a small 70s built unit block of only nine. Itâs not much more than a really big house and not much to go wrong. These new âBorg Cubeâ developments are far too complex and cost a fortune to run. It sounds like people donât do any research into what theyâre buying into, basics like strata, building and pest report. I think people get carried away with the bling, stainless steel appliances, gyms, pools and other things. Doesnât mean much if the building itself is shoddy!
If you save $300k by buying an apt over a villa/thouse, throw $100k into some dividend paying ETFs to cover your OC fees.
Where are people getting an extra 100k to chuck into ETFS after buying a house?
These people are so out of touch. Probably bought his house for 450k 15 years ago
They said unit or t/house
I meant unit/townhouse. Banks don't typically allow you to borrow more than what the property is worth so how do you get the extra funds
By not over committing, having spare $ spending less than the banks will lend....
If you put aside cash to put into ETFs doesn't that mean you would have to borrow more to cover the mortgage? Then you have to rely on the fact that your ETFS will outperform the interest on the extra mortgage, which is not always guaranteed.
Buy a house then without Strata
We need to encourage more medium-high density housing in areas with infrastructure, not urban sprawl with poor infrastructure further and further out from the cities. High OC fees so not help with this.
Gonna need the rich boomer investors to stop buying them first.
Typical comment from a delusional boomer. Buy a house, why didn't I think about that.
Yep. I lived in a strata block in inner SE Melbourne where we paid $10k per annum in fees. Actually outrageous. No lifts, no gym, ancient old building too. The committee did fuck all. I was stoked when I sold the place! And sadly it was an enormous deterrent for so many buyers. We had buyers emailing the agent being like âsurely this figure is a typoâ. Nope.
I'm in Melbourne as well, not far from you probably (also inner SE). I'm here to do a people a favour - do not buy an apartment where you will pay that much in OC. Because you'll have a hard time selling it if you are unhappy (and you will be). The first thing an informed buyer looks at is not pathetic cosmetic work they did to sell, but how much is OC. When they hear 10,000 (+ council rates, water rates etc) they run away. Unless they are easily taken advantage of. Go ahead, finance a rort if you don't care about your money. Also, it all goes on "maintenance" and insurance. If they need anything done, they have to raise money. Like, I've read a couple of contracts where cladding needs to be removed, and owners need to pay millions $$$$$$$$. Don't go to inspect before finding out what the oc is. Save yourself some time, have respect for yourself. If the agenties to you and says "we are still waiting for that information", tell them you'll come to inspect once they got it. Buy in an old style, double brick low rise where most people are owners, preferably no lifts. Look also for top floor corner position.
I would never buy an apartment tbh, way too risky, better off putting that deposit into shares. The horror stories of special levies or just skyrocketing stratas for other reasons, which you have no choice but to pay (because who's going to take it off your hands once this comes to light) [https://www.theguardian.com/australia-news/2024/apr/21/completely-blindsided-new-owners-of-strata-properties-shocked-by-special-levies](https://www.theguardian.com/australia-news/2024/apr/21/completely-blindsided-new-owners-of-strata-properties-shocked-by-special-levies) [https://www.smh.com.au/property/news/sydney-apartment-investors-fear-debt-trap-as-levies-skyrocket-20220126-p59rcd.html](https://www.smh.com.au/property/news/sydney-apartment-investors-fear-debt-trap-as-levies-skyrocket-20220126-p59rcd.html)
Why 10k though
$10k per annum maintenance fund. Plus $800/quarter for the OC management fees.
What maintenance is the building rooted? Seems high
It was to fund window replacement that never happened. I sold 3 years ago and it still isnât done đ
This is quite a strange post. My strata committee (block of 10) is very friendly and we work closely with the strata manager to get good value for money in maintenance tasks. There's no way I'd want to manage a building myself.
For our old unit it's like $400 a quarter and that includes building insurance and our little lawn gets mowed and hedges/trees trimmed. It really is a case of DYOR, some stratas are an absolute ripoff and some seem to offer okay value for money.
This post could not have come up at a more appropriate time. Iâm currently in the market for an apartment (first time buyer and yes it will be my main residence). Buying by myself so cannot afford a house unless I want to move to middle of nowhere. One of the apartments Iâm really really interested in has $7100 body corp p.a. The building has no gym, no pool, no bbq area, no garden, no car stacker etc. The building is just 9 years old so shouldnât be in any dire need of expensive repairs. From my understanding, most of the levy is going towards wages of a âbuilding managerâ. But what is being managed exactly when there are no communal facilities apart from lifts, utilities etc.?
Just think of a unit like foxtel, you pay to use!
I just downsized. Last year or two - *either* me spending two hours of my time each fortnight at a bare minimum mowing and trimming hedges, sweeping leaves, washing down possum poo or alternatively spending maybe $2500 a year on a gardener to do that per year. Burst pipe in the back - $800 to make it safe. Quoted $4000 to pull up garden and reattach. Huge rates bill because it's a crappy house but on a big block. If I put in a lift it would be $2000 per year to have maintained. Whatever the water usage component is That's without considering the cost of maintaining a pool in either type of property. My point being that one way or another the areas outside the front door need to be maintained..
Ok Mr property expert.
Join the committee so you can be involved with the decisions. You may find that the expenses are justified, and if not you can do some research and make alternative suggestions. The OC is driven by other owners who also donât want to waste their money. Strata manager has to do what the OC says.
Most of the OC budget goes to trades. OC im in get 5+ quotes for work over 10000, tradies see a quote request from strata its going to come back triple the price, regardless of whether there's any 'dodgy kickback'.
Iâve only ever lived in a house so had no idea about them, but all the stuff I read on hear about strata/owners corp/body corp, I would NEVER buy a place that has any of these, thereâs enough rules and controlling factors over your life all-ready, to voluntarily sign up to these seems like madness!
So what's the alternative according to you? You do realise housing prices are criminal in this country. Housing is a pyramid scheme that props the economy. Some people have only choice between renting forever (renting an apartment that is, and dealing with demonic real estate agents and poor quality), or buying an apartment. More than 2/3 of Germans live in an apartment. But they do not sponsor OC mafia and have much better quality of construction.
I'm the only owner occupier on commitee it sortve works in my favour as they consider me their eyes on the ground. They are not unreasonable aswel it's more the way strata rules work that is dog shit. My biggest advice is watch out who they keep getting quotes from. They kept going to a big builder who over charged quotes, always had issues and I highly suspect Was paying kickbacks to strata managers firm
You couldn't pay me to own a strata property....Â
I guess same way you couldnt be able pay for a major repair solo. Its alot better split 8-12-24-50 ways. No lawns to mow, no bins to take out...
That's fine, you can pay your $50k share of a million dollar fix... lol. Even small problems are costly with strata and you have nil control over the schedule or cost. Good luck!