9 factors to consider when buying strata titled property

Here’s a list of 9 things to consider if you’re currently evaluating the purchase of a strata apartment:


An artist’s impression of No 1 Lachlan, Lachlan St, Waterloo. Photo: Supplied

Strata inspection report

A strata inspection report is often cheap and easy to order. Take a good look at the property’s management history to really know what you’re buying into. Better still, get a conveyancing expert to assess the report on your behalf. A potential buyer should study the strata report in concert with their legal adviser because it provides information such as the precise amount of levies, whether any special levies are envisaged and can even give cues as to whether there is disharmony in the block. It’s also advisable to review the balance sheet to ensure the owners’ corporation is a carefully managed entity with a history of fair and responsible dealings.



Every owners’ corporation adopts its own by-laws and pet exclusion is not uncommon, although some state laws put the onus on the strata committee to define the pet as a nuisance before imposing a ban. So, check before you buy and make sure you provide a copy to your tenant.  Items such as safety and security measures and floor coverings can also be governed by the by-laws. Such factors can have large ramifications for renovations that you may have in mind for the property.



Artist rendering of Alchemy, Redfern


Pools, saunas, gyms, spas and even elevators are convenient and can add to the appeal of a block, but if they happen to be part of your strata building you will be subsidising their maintenance through your strata levies. Newer strata developments may come with any or all of these wonderful facilities, but be prepared for a hefty strata levy…


Strata levies

Strata ownership by definition means shared expenses. Your strata levy is a compulsory payment made towards the upkeep and maintenance of the common areas of the property. It’s not uncommon in inner-Sydney areas for levies to exceed $1,250 to $1,750 per quarter for a standard two-bedroom unit. You need to factor these payments into your budget. The landlord, not the tenant, is responsible for the payment of levies, so you might consider purchasing a unit with lower strata levies. But if the levies are too low, it could be because the necessary maintenance is being neglected.


Mix of investors and owner-occupiers

In general, owner-occupiers care for the common areas and facilities while renters are far less inclined to do so. That’s why we’d recommend you find out the ratio of investors to owner-occupiers from the local real estate agent or the strata manager.


Age of the block

Sometimes it’s important to balance age, looks and practicality. Some of the 1960s-1980s red or blonde brick apartment blocks aren’t always the most attractive to look at, but they were built to last. On the other hand, newer units usually have more space efficient layouts. Off-the-plan or new units may hold more appeal for investors wanting to benefit from tax depreciation advantages.



Artists rendering of Bourke and Philip project, Waterloo

Property inspection report

Assuming you choose a block that is not new, check for water penetration in top floor units and rising damp in garden apartments.  A property inspection report by a competent building professional is the best way to settle any doubts if any of the warning signs are present. If the unit looks newly renovated, it pays to check that the current (or previous) owners obtained the necessary permission from the owners’ corporation for the changes. If it turns out the work has been carried out without authorisation, the owners’ corporation may hold the new owner liable for any damage caused to the common property.


Size of the unit

If you need to borrow to fund your purchase, find out what your lender’s criteria are in relation to size. A one-bedroom apartment might be all you want, but if it’s under 50 square metres internal size (which excludes balconies and external storage) you might find it tough to get cheap mortgage finance.


Size of the block

All things being equal, you should favour smaller apartment blocks (up to 10 to 12 units is ideal). This is typically because of the historical trend that the land value appreciates over time, therefore, in a small block you are buying a greater percentage of land entitlement.  Smaller blocks, for this reason, tend to be more sought-after and this favours capital growth in the long term. However, be mindful that the structure will deteriorate over time. As such, small blocks carry a greater risk of special levies if the sinking fund is not abundant. It’s also worth being mindful that many of the cheapest lenders do not provide mortgages for units located in ‘high density’ apartment blocks. A high density block can generally be defined as a block in excess of 4 floors and/or 30 units.


For further information about strata living refer here and for assistance with financing a new or existing strata purchase, chat with the team at Naritas Finance on 1300 558 887 or simply use the form located here.