Purchasing an apartment, unit, or townhouse typically entails becoming a member of a body corporate, which is responsible for the management and repair of the building and, in some cases, the whole neighbourhood. It is responsible for the common spaces and, in certain situations, may be required to pay for services such as pools, gyms, and, in other cases, concierge services. This results in recurring expenses to pay the cost of these services. Additionally, the same body corporate is in charge of ensuring that the building has proper insurance coverage.
A “sinking fund” will almost always be in place, which is a pool of cash that may be used in the event of unforeseen needs, such as severe structural repairs or emergencies that are not covered by insurance coverage. Living in a house, on the other hand (which is often freestanding), implies that the obligation of taking care of the upkeep and obtaining insurance rests on the shoulders of the property owner. On the contrary, there would be no recurring payments for strata or any other services provided by the developer. This section examines some of the advantages and disadvantages associated with the various housing options.
Advantages of Forming a corporation
Generally, the costs of maintaining the building are divided, and the building management will coordinate the completion of the job. Due to the fact that you acquire insurance in bulk as part of the owner’s organisation, structural home insurance may be less expensive. Cleaning, grass mowing, gardening, insurance, power in communal spaces, and routine repairs are all included in the cost of maintenance. The body corporate Geelong is in charge of overseeing proposed improvements, resolving general issues, and collecting payments from the property owners to cover the associated costs.
The sort of renovations that may be carried out in a unit/apartment may be restricted due to the fact that they are often smaller than a home and share walls with other units/apartments. Strata levies can range in price from $1,500 to $30,000 (and possibly more) each year, depending on the services given and the kind of home in which they are collected. These fees are usually paid on a quarterly basis.
Advantages of a free-standing home
Renovations and/or additions are normally subject to few if any, restrictions (unless placed by the council). Any funds incurred for repairs and/or renovations are a benefit to the property’s proprietor.
Maintenance and repairs of any kind are the exclusive duty of the property owner, and they are fully at their expense. Because the expense is not shared with anyone else, additional criteria such as the size of the property and/or the cost of insurance would often be borne exclusively by the owner.
So, what is the more advantageous investing option?
There is no correct or accurate response in this situation. The decision is ultimately based on personal choice and financial circumstances. In addition, while determining whether to invest in a body corporate housing or a single-family home, consider your lifestyle needs and preferences.