Top 10 Tips for buying a Strata Property

Look out for the June edition of the Smart Property Investment magazine. Our very own Inger Brettle is quoted in an article titled ‘10 Tips for Strata Buying Success’ (p.32)! Here is a summary below:

When considering your next investment purchase, you may want to give serious thought to buying a strata property. Compared to houses, the costs of repairs and maintenance for apartments are often lower, and rental returns can be higher. However, purchasing into a shared complex also carries unique considerations.

Below is a consolidated list of 10 things to note if you’re pondering buying a strata property—an option that can be very rewarding if you do your research and choose wisely.

1. Strata Levies

When buying a strata property, you’re essentially purchasing shared responsibility for the complex’s upkeep. Strata levies (or fees) cover maintenance and repairs of common areas like gardens, hallways, and lifts. The amount varies depending on the building’s size, age, and amenities. If levies are conspicuously low, find out whether essential work is being delayed.

2. Floor Space

Lenders often have strict minimum size requirements. If the apartment is under 50 square metres, you might struggle to secure finance on favourable terms. Before buying a strata property, confirm with your lender that the size meets their criteria to avoid complications.

3. Economies of Scale

Smaller apartment blocks (fewer than 12 units) can be more appealing in the long run due to easier management and a stronger sense of community. Larger complexes might offer amenities like pools or gyms but often incur higher levies. Weigh up whether those extra facilities truly add value for you or potential tenants.

4. Old Versus New

An older, solid brick complex from the 1960s to 1980s may cost less and have proven durability, but it might lack modern layouts or additional bathrooms. Newer buildings often feature contemporary designs, but be aware of potentially higher strata levies or unknown construction flaws. If you’re buying a strata property off the plan, factor in possible defects or delays.

5. Owner-Occupier Ratio

A healthy mix of owner-occupiers and investors typically results in better upkeep. Too many investors can sometimes mean less attention to common property. Check with local agents about the building’s occupant profile so you know what to expect after buying a strata property.

6. By-Laws

By-laws dictate what residents can and can’t do—from keeping pets to renovating interiors. Make sure to review these rules thoroughly beforehand, especially if you have specific lifestyle requirements or want to allow tenants with pets. Unapproved changes or pets can result in disputes and possible penalties.

7. Facilities

Features like pools, gyms, and shared BBQ areas can boost your property’s attractiveness to tenants or future buyers, but they also drive up strata levies. Be realistic about whether you’ll use or benefit from these amenities enough to justify the extra expense.

8. Red Flags and Maintenance

Look out for common issues like water leaks, dampness, or structural cracks. Ask about the sinking fund (capital works fund) set aside for major repairs. If past renovations were completed without the owners corporation’s approval, you could inherit liabilities after purchase.

9. Strata Inspection Report

A strata inspection report reveals the building’s financial health, how maintenance issues are handled, and any history of legal disputes. Reviewing meeting minutes can help you gauge how proactive the owners corporation is about repairs and whether large-scale works (and associated costs) are on the horizon.

10. Do Your Homework

Above all, research thoroughly. Compare recent sales, talk to neighbours if possible, and consult with a trusted buyers agent. The more you know about the building’s management and future expenditure, the more confidently you can negotiate and plan.

With these insights from Inger Brettle and other experts, you’ll be better prepared when buying a strata property—whether your focus is on lower maintenance, higher rental returns, or a sense of community. By paying close attention to levies, by-laws, facilities, and financial reports, you can make a well-informed decision that aligns with both your budget and long-term investment goals.