There are a number of factors that contribute to making an informed decision when buying an apartment.
Here’s a top 10 checklist of items that buyers should be considering before purchasing an apartment, so that you can be more informed and make the right decision.
1. Check the by-laws on short-stay letting
Some developers choose not to monitor by-laws in relation to short-stay letting. This means that you could move into an apartment and realise that you are surrounded by short-stay properties which could impact not only on your peace and quiet but also on the Strata Company’s liability. It is important that you read the by-laws thoroughly, and if it is not evident, question the developer or sales agent for further clarification.
2. Request a forecast strata management budget
Most developers will provide a strata management budget for one year, post completion of construction. However, as most builders’ costs are covered in the first year by the defects warranty, the budget can often be minimal and then jumps up (sometimes significantly) in the second and subsequent years. Requesting a three-year budget forecast (as a minimum) will let you know how your strata fees may increase over that time frame and then you can consider your budget accordingly.
3. Check if there are any forecast capital works proposed
In older buildings there can be major capital upgrades such as replacing lifts and the like. If the strata management does not have enough of a reserve fund, then the difference in the cost can be levied against the owners. There was a recent case, where each apartment owner was forced to pay $12,000 to upgrade a lift due to insufficient sinking funds to cover the costs. This is an unexpected cost that you would rather avoid!
4. Check to see the number of visitor bays and how they will be managed
Research has shown that while 70% of apartment owners were happy with their parking bays, 50% would pay more for an additional bay. The main issue is that most one-bedroom apartments come with one bay, yet there could be a couple living in the apartment with 2 cars. Hence, they tend to use the visitor’s bays – which means there is not enough parking then for visitors! It is recommended that visitor bay passes are utilised by the strata manager and that the parking is behind a gated area, so that the visitor parking is not abused.
5. Check for planned developments in your area
A river or water view can command a higher price – but if someone builds in front of you – and you lose your view – you lose the ambiance and possible property value. It pays to speak to the local council about what is planned in the near future – but ultimately the only way you can guarantee a view is if there is no other land in front of you i.e. water’s edge or there is planning certainty for the area around you.
6. Make sure your apartment reflects good quality design principals
It is worth checking out the developer and builder online and seeing if they have won any awards or better still have testimonials from people who reside in their buildings and or/other developments. Otherwise ask what aspects of the development meets design guidelines or better still ask the developer where they have exceeded the Australian Building Standards.
7. Check that the developer, builder and strata manager are not one in the same
In some developments, the developer, builder and strata manager are one in the same. This does not allow for any impartiality, especially if the developer has the bulk of the say on strata matters as they own most of the apartments. A degree of separation is definitely needed when it comes to professionally dealing with the finances and maintenance of your development.
8. How much do you want to pay for strata fees?
Moving into an apartment frees up your time and finances – but the one factor you have to consider is the ongoing strata fees. It has been determined that reducing car ownership for example, can often offset the strata fee costs (savings on maintenance, fuel etc) and this is even more viable if you are living in a major city or town. Consider what is essential to you when it comes to amenity – if you don’t mind not having a pool, gym or even lift – then these are all costs that can save you strata fees.
Privacy and sound-proofing are the two biggest qualms for buyers and hence it is important that you ask about the building standard for the walls – especially on the shared walls. All building work must comply with or exceed the requirements of the Building Code of Australia (BCA). As such, you need to check if these standards are simply being met or if they are being exceeded. It is also worth seeing if you can stay in the development for a period to understand the building soundproofing and if it meets your expectations.
10. Future proofing
In ten years, there is a prediction that 50% of the vehicles on the road will be powered by electricity and yet how many developments have green car charge points? Check to see if your building is also relying on copper wiring or fibre optics as this will impact on the upgrades within the next decade and associated costs. Overall with the latest available technologies, you definitely want to be looking for a building that is future proofed which will also provide medium-term cost savings.
WRITTEN BY SAMANTHA REECE