Even though it’s practised in countries all over the world today, the concept of strata title as a property ownership structure started right here in Australia back in 1961.
A novel concept at the time, the strata title was different to the traditional Torrens Title model, where the purchase of a freestanding home or piece of property also meant buying the land it was built on. But the new strata title concept didn’t apply to freestanding structures.
Rather, the strata title’s shared ownership model applied to individual units, or lots, within an apartment building or subdivided property connected by common areas like driveways or gardens.
The arrival of comparatively low cost individual strata title properties made it affordable for more Australians to invest in real estate for the first time. And it’s been an influence on the housing market ever since.
Strata Title Costs
Owning property through a strata title typically costs far less than being the sole owner of a freestanding structure. In most cases, the price of your monthly mortgage won’t be any more than what you might pay in rent for a similar apartment, townhouse or unit.
And because these kind of properties are so cost-efficient, they stay in high demand.
So whether you’re looking for a new place to live or just interested in a solid investment opportunity, the values of strata title property tend to go up, and are usually easier to sell at a later date when you’re ready to move on – or cash in.
The lower cost of strata title properties also make it easier to obtain financing. So it’s often a great option for first time buyers.
7 Great Advantages of Owning a Strata Title
There are plenty of other advantages to strata title beyond the money you’ll save on upfront property investment costs. Advantages like…
1 – Property upkeep
When you’re the sole owner of a freestanding property, you and you alone are responsible for property upkeep, and maintenance costs.
But within a strata title scheme, a legal entity called the owners corporation, handles the day to day operations of the building or property. They schedule regular maintenance and arrange for any necessary repairs.
As an individual owner within the strata title scheme, you pay strata levies quarterly into an administrative fund managed by the owners corporation. The owners corporation use this fund to pay for property upkeep. So you’re never surprised by unexpected, out of pocket expenses.
Money from strata levies is also used to pay rates, taxes and for the maintenance of common areas, which is important to keeping up the building or property’s overall value.
2 – Air space only
In a strata title scheme, ownership usually includes the “air space” of an individual apartment, unit or townhouse. But not the larger structure or subdivision. Your property’s air space is defined by the lot boundaries set in the strata plan. And typically refer to anything on its inside; walls, ceilings, floors and permanent fixtures like toilets and kitchen bench-tops.
Air space can also refer to indoor/outdoor areas like balconies, courtyards and pergolas.
Outside of your air space, strata title ownership also entitles you to your fair use of any shared common areas, facilities or amenities that are part of the larger property. After all, your strata levies are paying to maintain them.
3 – Use of amenities
Because strata title properties share common spaces, it means they often include access to a variety of shared amenities.
Amenities could include swimming pools, gymnasiums, covered BBQs, shaded picnic areas, shared laundry facilities and even vibrant community centre. Strata title property owners enjoy inexpensive access to a wide variety of luxury on-site amenities as part of a shared ownership scheme. All without ever having to leave home, or pay anything beyond their quarterly levies.
4 – Community & security
By their very nature, strata titled properties put you in closer proximity to your neighbours, than you would get by living in a freestanding home. So you’re bound to develop relationships with the people living around you.
- When you buy into a strata title property, you’re also buying into a close knit community of neighbours that share your considerations and concerns. Scheduled strata meetings and organised social occasions are regular events in many strata title structures.
- In addition to neighbours that have your best interest in mind, strata titled properties are often equipped with added safety measures that you won’t often find with freestanding properties. To protect the larger investment, many apartment buildings are now fitted with video security systems and electronic door buzzers. And more new subdivisions are opting to become “gated communities”.
5 – Lower council rates
Council rates are based on a property’s value. Because you only own one portion of a larger building or subdivision with a strata title, you only pay a fraction of the council rates and local service fees you would as the sole owner of a freestanding property with a Torrens Title.
6 – Lower insurance costs
All property owners need insurance. Insurance to cover the home and its contents.
Because strata properties are physically smaller than most freestanding structures, and generally considered more secure, you’re likely to end up saving a small fortune on insurance premiums compared to what a sole owner would pay for similar coverage.
7 – By-laws to protect assets and enhance community living
Every apartment building, gated community and cluster of townhouses is different. So it’s important to know the by-laws of a strata building or subdivision before purchasing a property inside of it.
Strata by-laws are managed by the owners corporation or their body corporate management administrator. They dictate the rules and regulations of a complex or community. And in many cases, by-laws are what will help determine whether or not a strata title property is the right fit for your lifestyle – or investment portfolio.
By-laws can influence everything from pet ownership to rubbish disposal. They’re an essential part of a building or community’s safety and security.
Understanding the strata by-laws of your property prior to purchase is the most effective way to avoid conflict and disputes. And the best way there is to get the most out of your strata title property investment.
Strata Title – a Great Option
Strata title is not for everyone, of course. But for those who don’t want the cost and upkeep associated with buying freehold, and for those who like the idea of living in a community, strata title is a great option.