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Useful Tips for Property Buyers – Pyrmont Real Estate

Pyrmont Real Estate Useful Tips for Property Buyers   Pyrmont Real EstateStrata reports – how to interpret a list of defects.

It can be easy to be scared off a property when you read a strata report that contains a long list of building defects. Sometimes it is a warning of future inconvenience and cost. However, it can also indicate a pro-active strata manager and an owner’s corporation that cares about maintaining their investment. Look past the list of problems and see if there is evidence of a concerted and continued effort to address the issues. And keep an eye out for potential special levies. This is a sign that there has not been sufficient sinking fund contributions in the past to cover repairs that should have been anticipated. It’s not really fair that new owners should have to pay for the neglect of past owners, but it is a reality in some buildings.

Strata levies  – how to know what is reasonable.

When the levies for a building are lower than expected, we look for evidence of pensioners or investors historically dominating the ownership of the complex. These two groups have often been the culprits for keeping levies lower than is necessary to maintain a building in the long term. The discretionary portion of the levy is the sinking fund contribution, so when building issues arise, or upgrades are required, there is not enough money to cover the cost.  So, what happens next? Either the issues are ignored and over time the building looks run-down and/or a special levy is struck. Regardless of whether you are an investor or an owner occupier, you are probably interested in capital growth, so all these outcomes can negatively impact the value of a unit or townhouse.

It is now mandatory for owners’ corporations to undertake a 10 year maintenance plan and sinking fund forecast.  Those buildings with low levies will face sharp rises if the recommendations in their report are adopted. Often new owners end up paying for the inattention of previous owners, which is entirely unfair but a fact. Those buildings that have been responsible in their financial management and avoided the temptation to keep levies too low will see much more modest increases and prove to be better investments in the long run.

If you are going to buy in a large complex, make sure you buy the best apartment your money can afford.

We advise our clients to be cautious when looking at apartments in large complexes. Properties in these developments often trade more like commodities than real estate. By this we mean that there is often more than one apartment for sale at any one time, which may offer you choice when you are buying, but can be problematic when you need to sell.

Having said that, if the location, facilities and overall style of the complex appeals to you, how can you ensure you buy the best apartment? Following is a checklist of what we look for:

  • Natural light – the higher up in the building you are, generally the better natural light, however the aspect is crucial so look for a north, north-east or north-west aspect from the living areas.
  • Cross-flow ventilation – are there only windows on one wall?  It is preferred that windows on opposite sides of the apartment, allowing for breezes and more efficient cooling.
  • Common walls – some apartments have three common walls (to be fair, not many do), some have none, most have two. Common walls can have an impact on noise, so the less shared walls the better.
  • Privacy and outlook – preference should be given to apartments that look outside the complex or internally over landscaped gardens rather than into other apartments.
  • Proportion of rooms – the apartment needs to be balanced. Sometimes the bedrooms are larger than the living area, or the ensuite bathroom is larger than the main bathroom, or there is wasted space in foyers and hallways. All of these scenarios should be avoided.
  • Outdoor space – this should be usable (is there space for a table, chairs, bbq?) and accessible from the living area.
  • Noise – avoid apartments next to the entrance, opposite the lift, overlooking a noisy road, etc.

For more information on property buying, see the Good Deeds Property Buyers website at www.gooddeeds.com.au


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