Investors looking to purchase apartments are being advised to exercise extra caution in light of a new report indicating that nearly half of Australia’s strata buildings are over 25 years old, with a growing need for maintenance and upgrades.
“You wouldn’t buy shares in a company without first looking into it and the foundations it was built on, so you shouldn’t buy an apartment without doing the proper research either.
“That means reviewing the strata records carefully, reading the minutes of meetings and reviewing the maintenance plans and making sure they’re properly funded into the future.”
“You need to see a sensible discussion of any issues in those minutes, as well as a repairs and maintenance program and a 10-year capital works fund,” said Karen Stiles, policy director of the Owners Corporation Network, the peak body for apartment owners.
“You want to see levies and capital reserves sufficient to maintain the building to a high standard and deal with unexpected items like magnesite removal or stormwater repairs without striking a special levy or needing to borrow. A well-managed and maintained building will be in a healthy financial position, as well as having increased amenity for residents and appeal from the street.”
