Is this too high for strata costs?

Hi all,

I am looking at a 2br unit for sale in a complex of 4 units.
The strata fees are $450 p/quarter, and council rates are approximately
$600 per year.

Is this too much to pay to strata? My current IP I own is $330 p/quarter.

What questions should I be asking as to why it is this much for strata? I know it covers building insurance and garden/maintenance etc but what else?

Thanks,
Brad.
 
Hi,

where is the complex. Is there a pool or anyghing like that ?Is the complex old ?
You'd have to ask the strata manager exactly what the levies cover and why they are so high.

you also need to work out which part goes to sinking, and which to levies
 
You must ask for a breakdown on how much goes to sinking fund vs admin.

Admin means the company you pay to take care of the business of running the body corp (calling meetings, paying rates, arranging insurance to be paid on time etc)

sinking fund/levies means the amount going into kitty to pay for upkeep/improvement of building.

Check online to compare levies with other buildings in the same street with same facilities (same no. in the block, lifts/security etc).
 
I'd prefer to be in a building which is paying a realistic sinking fund than one which might have to call special levies which many of the then older residents might not be able to afford. Is there A QS report to indicate what works will need to be done, when and costs?
 
Hi Brad

You should ask for a copy of the latest budget, which will show how the levies are determined. The Admin Fund is based on known and anticipated recurring expenditure, and covers things such as insurance, bank fees, cleaning, lawns & gardens, fire services, repairs and maintenance, management fees, common water and electricity, tax return. The aim of the Admin Fund is not to make a profit, but to break fairly even. It is usually based on past years' expenditure.

The Sinking Fund is for long term replacement and upkeep of the common property such as painting, gutter replacement, fences, carpets, garage doors etc etc. As has previously been stated, it is important for the owners to be putting a realistic amount into the Sinking Fund so that large special levies aren't required as the building ages.

It is almost inmpossible to compare levies amongst buildings unless they are identical in design, amount of grounds etc.

Not sure about Qld, but in NSW it is now mandatory for a Sinking Fund analysis to be obtained by the owners corp (over a few year period depending on the age of the building). In most cases this is prepared by a quantity surveyor, but could be completed by owner/s who have expertise in this area. The aim is for sensible and realistic amounts to be built up in the Sinking Fund. However, the result is that many owners in many, many buildings are going to be hit with a huge increase in levies because they have not been contributing enough in the past. I think the day is pretty much gone where people will buy a unit thinking it is a cheaper alternative to a unit. At least with a house, you have the choice of whether to carry out maintenance., and when.

Also, remember that smaller blocks often have higher levies because there are less units to share the cost of lawns, gardens repairs etc.

Wake
 
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