Investing in Strata Property: Pros and Cons

If you’re looking to buy or develop a property in New South Wales, no doubt you’ll have come across Strata Titles.

A cost-effective alternative to traditional property investment, Strata Property is growing in popularity every year. Around half of all Sydney property transactions are now Strata Titles, but that doesn’t necessarily mean it’s the right choice for you.

Read this quick guide to find out the main pros and cons of Strata Property and where to find out more.

What is a Strata Title Property?

A Strata Title gives you ownership of an individual Lot within a larger property (such as an apartment or a house in a development), as well as shared ownership of common areas (such as corridors, gardens, lifts and amenities).

This differs from a standard property title, which only includes ownership of an individual Lot, but there are other differences too.

For more details, read our guide to understanding what a Strata Title means.

Advantages of Strata Property

Compared to a freestanding property, a Strata Property offers:

  • Cheaper land cost per unit, especially for developments in city centres
  • Higher demand from buyers and renters, driving greater capital growth
  • Access to communal facilities (when present), with maintenance costs divided between all owners
  • Voting rights on matters related to the Strata Scheme as part of the Owners Corporation
  • More favourable loan terms when you apply for Strata finance

Disadvantages of Strata Property

Problems with Strata Property are usually related to individual schemes. These may include:

  • High Strata Fees, more common in developments with many amenities or older buildings that require more maintenance and repairs
  • Disagreements with other Owners, which may require dispute resolution
  • More responsibilities, unless you hire a Strata Manager
  • Your Lot may depreciate in value if another Owner sells their Lot at a low price

Things to consider before buying

Strata Property is as diverse as any other type of property, with options to meet different needs and price ranges. To make sure the Strata Development you’re considering is right for you, check with the scheme or your Strata Manager about the following points:

  • Facilities – do you need a scheme with a swimming pool, gym and other amenities? Remember that these extras will increase the cost of Strata Levies.
  • Age of the property – older buildings may need more repairs or renovations. This may give you more opportunities to develop a property, but will also be reflected in higher Strata Levies.
  • Strata Fees – how much will you have to pay for maintenance, repairs and other expenses related to Common Property?
  • Strata Plan – this should clearly show what’s included in your Lot, including any parking bays and other outdoor spaces.
  • By-laws – can you abide by the rules set by the Owners Corporation?

Is Strata Property right for you?

Do you want to know more about Strata Property in NSW? Talk to our qualified Strata Managers at Lake Group Strata today.

Call our Charlestown office on 02 4942 3305 or our Maitland office on 02 4933 6466. We cover all areas across Newcastle, Lake Macquarie, the Hunter Region and Myall Lakes.

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