The benefits of an owners corporation. An Owners Corporation was previously known as Body Corporate. We prefer to look at Owners Corporation with a pragmatic approach. Strata fees are in place for a reason. They are shared costs between residents for mandatory fees. These fees would typically include building insurance, public liability insurance and any legislation-based payments. These fees are payable no matter what, even you didn’t have an Owners Corporation.
An Owners Corporation also initiate owners’ contributions for sinking funds, maintenance levies, gardening and required capital improvements. more likely to result in a well-maintained block.
Think about it, your investment property will be well cared for, secured with the right insurance coverage and consistently maintained to its highest standard to ensure it is well placed to continue to yield consistent, strong returns and capital growth.
More importantly, an Owners Corporations can comfortably finance issues such as roof restoration, asbestos clearing, repainting, guttering/spouting repairs, garden maintenance, security gate maintenance and exterior upgrades.
It seems like a tough choice for some, but the implication is that land value, capital growth, tenant prospects, rental yield, and total out-of-pocket shortfall are the elements which investors should place weight on. The flip side of buying a house on a full block (in an effort to avoid strata titling) is that the buyer is more likely to invest in an area which has lower capital growth prospects, lower yields and requires higher maintenance.
While an expensive Owners Corporations can whittle away great rental returns, however a cheap Owners Corporations can magnify issues which ultimately lead to stagnant capital growth, disinterest from potential tenants, and further degradation for existing owners to deal with.
We welcome the opportunity to help you make the right decision.
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While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
Dec 2017
