Buying an apartment, condominium, or townhouse usually includes joining a body corporate, which oversees the maintenance and repair of the building and, in certain situations, the entire neighbourhood. It oversees the common areas and may be expected to pay for services like pools, gyms, and, in certain circumstances, concierge services. As a result, ongoing costs are incurred to cover the cost of these services. Furthermore, the same body corporate oversees ensuring that the structure is adequately insured.
A “sinking fund,” which is a pool of cash that can be used in the event of unforeseen needs, such as severe structural repairs or emergencies that are not covered by insurance, will almost always be in place. Living in a house, on the other hand (which is typically freestanding), suggests that the responsibility for upkeep and insurance falls on the shoulders of the property owner. On the contrary, there would be no recurrent charges for strata or any other developer services. This section looks at some of the benefits and drawbacks of different housing alternatives.
Advantages of Creating a Corporation
Generally, the costs of building maintenance are split, and the building management will coordinate the job’s completion. Because structural house insurance is purchased in bulk as part of the owner’s organization, it may be less expensive. Cleaning, lawn mowing, gardening, insurance, power in communal areas, and routine repairs are all included in the maintenance fee. The strata management Victoria manages overseeing proposed improvements, resolving general issues, and collecting payments from property owners to cover associated costs.
The number and types of modifications that may be completed in a unit or apartment may be restricted due to the fact that these types of dwellings are often smaller than houses and often share walls with other units or apartments. The annual cost of strata levies can range anywhere from $1,500 to $30,000 (or even more), based on the type of residence in which they are collected as well as the services that are offered by the strata. The payment schedule for these fees is normally every three months.
Advantages of having a house that is not attached to another structure include: In most cases, there are not many, if any, limits put on remodelling and/or adding on (unless placed by the council). The owner of the property benefits monetarily from any expenditures that are spent on repairs and/or improvements.
The owner of the property is solely responsible for all upkeep and repairs, and these costs are totally borne by the owner. This presents a significant disadvantage. Additional factors, such as the size of the property and/or the cost of insurance, are typically carried alone by the owner since the cost is not shared. This is the case because the cost is not shared.
So, which of these two choices for an investment is the best one? There is no answer that is appropriate or enough to provide in this circumstance. In the end, the choice is determined by one’s personal preferences and current financial situation.