Buying a strata unit can be a profitable investment. We say CAN BE because it’s not always a sure shot. The profitability of your investment will largely depend on your ability to pick the right strata unit that will bring you a huge return. If you haphazardly pick just any unit that suits your fancy, you may risk burning your stakes and not getting anything out of the strata investment.
Investors picking a strata unit is just as, if not more crucial than strata communities picking the right strata manager. It is a step that can determine if the investment will be a good or bad one. So how do you ensure you invest in the right strata unit? Take note of these tips.
Pick a strata with the best location.
A great location will bring in potential tenants who are willing to pay good money just to be in a good spot. Among the locations you need to keep an eye on are those close to public transportation, schools, shops and cafes. Although you need to ensure that these criteria are met, avoid choosing those that are located right on the main road and opt for those on a quiet side of the street.
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Research intensively about the strata community.
After you’ve picked the perfect location, take a look at the strata communities belonging to that area. As a strata is a shared community, the body corporate management or owners’ corporation, strata manager and even the by-laws implemented in the strata matter. When you buy into the strata, you and your tenant will be part of this community and would need to deal with these people and adhere to their policies. Be on the lookout for any signs of disharmony within the owners’ corporation, and be particular about the mix of owner occupiers and investors within the strata. A strata with more than 50% owner occupiers is considered as a good mix.
Take a closer look at the strata plan.
The strata plan will show you all the units, shared property, as well as the property boundaries. It will also show you what other items are included if you buy into the strata, like a car bay for example. It’s important to take a look at the strata plan to know what is and is not included in the ownership and know what you are getting into.
Pay special attention to the maintenance plan.
Aside from finding out the levy that every strata unit owner must regularly pay for the maintenance of the strata, you also need to know their plan on how to spend this money. Look out for any future plans of the strata and whether they have enough financial reserves for regular maintenance and necessary improvements. If you find that the strata lacks the financial capability or worse, the titles strata management doesn’t have the capacity to plan ahead, consider this as a bad sign.
To make the most of your strata investment, you need to make necessary preparations before you actually buy a strata unit. These four tips above will help you prepare for that purchase and ensure you pick the right one. Only in ensuring you pick the right strata unit can you guarantee profitability.