July 16, 2024 • 18 mins
Breaking into the property market, or taking the next step to securing a new home, can be a risky one.
Sometimes the cheaper, easier alternative to purchasing a house is looking at an apartment.
But buying an apartment comes with its own set of rules and risks that you might need to be aware of before signing on the dotted line.
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CREDITS
Host: Claire Murphy
With thanks to:
Amanda Farmer, Strata Lawyer at Your Strata Property
Producer: Claire Murphy
Senior Producer: Taylah Strano
Audio Producer: Thom Lion
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:10):
You're listening to a Muma Mia podcast. Mumma Mea acknowledges
the traditional owners of land and waters that this podcast
is recorded on.
Speaker 2 (00:21):
Hi.
Speaker 1 (00:22):
I'm Claire Murphy. This is Mumma MIA's daily news podcast,
The Quickie. We are now just a couple of months
away from Australia's peak property selling period. As we emerge
from our winter hibernation into the spring air of September,
Ozzie is start to get out into the property market
in larger numbers and with a housing crisis still impacting
most of the nation, many will consider buying a unit
(00:44):
or apartment before a house due to the lower entry cost.
But buying an apartment comes with its own set of
rules and risks that you need to be very aware
of before you sign on the dotted line. So today
we're speaking to a woman who knows apartments inside and
out and can get us all the pros and cons
for owning one of your own. Before we check in
with Amanda. Here's the latest from the Quikie newsroom. Wednesday,
(01:06):
July seventeen. Today marks ten years since Malaysian Airlights Flight
MH seventeen were shot down by Russian missile over Ukraine,
killing all two hundred and ninety eight passengers on board,
including thirty eight Australians. Nearly one hundred family members of
those who were lost that day will attend a commemorative
service at Parliament House in Canberra, along with diplomatic representatives
(01:28):
from countries impacted by the incident and Australian officials who
were involved in the response on that day a decade ago,
Foreign Minister Penny Wong saying those killed remain in our hearts.
The Ukrainian Ambassador to Australia says it's still important to
hold the criminals of the Kremlin to account for the shooting,
as well as the invasion of his country. A Romanian
(01:49):
court has overturned a decision to allow Internet personality in
alleged sex trafficker Andrew Tate from leaving the country. Tate
was indicted along with his brother Tristan and two women
last year for suspected human trafficking, rape, and forming a
criminal gang to sexually exploit women. In April this year,
the court in Bucharest ruled that the trial could begin,
(02:09):
which Tate appealed. Pending a ruling on the appeal, The
four suspects were banned from leaving Romania earlier this month.
The court lifted that ban, but restricted the force movements
to within the European Union. The prosecutors challenged the decision,
which led to yesterday's overturning of the travel freedom, again
restricting them to within Romania. Tate told reporters outside the
(02:30):
court that God has made a plan for him and
he's simply following his decisions, saying he's not emotionally involved
in the process, so he's just going to follow the
law and respect the Romanian judicial system, breaking with tradition.
Donald Trump has made an appearance on the first day
of the Republican National Convention, his ears sporting a white
bandage from the attempted assassination two days before, receiving a
(02:54):
hero's welcome from the party Faithful. The crowd chanted fight, Fight,
Fight as Trump entered the arena late in the evening,
referring to the word the former president mouthed as he
was helped off the stage at the rally in Pennsylvania
after he'd been shot at the gunman also so taking
the life of a member of the crowd who jumped
over his family.
Speaker 2 (03:12):
To protect them.
Speaker 1 (03:14):
Trump named his running mate and Vice president candidate J. D.
Vance from Ohio.
Speaker 2 (03:18):
On the night.
Speaker 1 (03:19):
Vance is the first millennial to ever appear on a
presidential ticket. The movie that saw Alec Baldwin face caught
for the shooting death of cinematographer Helena Hutchins is being finished,
but the scene that saw the tragedy unfold has been cut.
The Western was being filmed in New Mexico in twenty
twenty one when Baldwin was rehearsing, drawing the gun and
pointing at the camera where Hutchins and director Joel Susa
(03:42):
was standing. Baldwin pulled the trigger, not knowing there was
a live round inside. The bullet discharged, killing Hutchins and
seriously injuring Sousa. The camera wasn't rolling at the time.
A criminal charge of involuntary manslaughter against Baldwin was dismissed. However,
there are still civil lawsuits pending from Hutchins's parents and
her sister. Rust returned to filming last year with Hutchins's
(04:04):
husband and now widow, Matthew on board as an executive
producer after he reached a settlement with the film makers.
The film is now finished, but the scene in the
church where the shooting unfolded is not included in the
final cut. That's what's going down around the globe today. Next,
if you're thinking about buying an apartment because the house
is just way too far out of the budget, we'll
get you across everything you need to know before you
(04:26):
take the plunge. A recent story from an apartment block
in Melbourne is sadly becoming more common. The Frankston South block,
(04:46):
where residents purchased individual apartments for around three hundred and
sixty thousand nearly twenty years ago, is now costing them
tens of thousands of dollars more in repairs, with some
saying their apartments are now worth nothing. The thing is
they can't not pay the money they're obligated to as
part of special levees strata fees. They found out just
(05:08):
two weeks before Christmas twenty twenty three via email from
the local council that their apartment building was now subject
to an emergency works order. Their homes posed a danger
to life arising out of the conditions of the building.
There'd been multiple balcony collapses. Water leagues had rotted the
carpet and gotten into the structure to the point that
(05:29):
some had mushrooms growing out of the walls, there were cracks,
black mold, and the underground car park had started to collapse.
It's estimated the cost to repair the building is nine
million dollars. The majority of that will be to replace
the cladding on the outside due to it being made
from a flammable material. While the builder behind the apartment
block has since been suspended by the Victorian Builders Association
(05:52):
and had his license canceled, he is not held responsible
for the repayments to the apartment owners, who News dot
Com or reporting have now just been sent a five
hundred dollars land tax bill to pay on top of
the repair bills for apartments they can no longer live in,
and their story isn't an isolated one. Earlier this year,
a newly built set of nine hundred apartments in Sydney's
(06:15):
Macquarie Park were also told they're living in a building
that's under threat of collapse due to the concrete slab
in the basement being defective. And in January, the residents
of Mascot Towers in Sydney's Inner South were offered a
settlement after they were forced to evacuate the complex due
to the amount of defects, they haven't been able to
live in them for years. Amanda Farmer knows how this
(06:37):
feels all too well. She's been an apartment owner for
many years, but found out recently that her most recent
purchase needed some unexpected work.
Speaker 3 (06:45):
I bought my first apartment in my twenties. I was
lucky enough at that stage to be able to afford
an apartment. I have to say that's about twenty years
ago now, and since then have bought and sold a few,
lived in a few, both as.
Speaker 2 (06:59):
A tenant and as an owner.
Speaker 3 (07:01):
And the apartment that I currently own I bought together
with my husband about six years ago and it is
in Bondai Junction in Sydney.
Speaker 1 (07:09):
Perfect great location. Apartment living's pretty popular around Bonde, isn't.
Speaker 3 (07:14):
It It is and it was all about the location
when we decided to move to an apartment. It is
a three bedroom apartment and our little boy was six
years old when we moved in, so we really enjoyed
having that extra space right across the road from a
park close to that awesome westfield, lots of ease of
access to transport and great people, great culture around.
Speaker 2 (07:38):
So we've really loved being in that area.
Speaker 1 (07:40):
What happened though for you as an apartment owner when
you found out that there were some major repairs required
on the apartment that you owned at the time. Can
you talk us through how you found out, how much
you had to pay to go towards those repairs, and
what you learned from that experience.
Speaker 2 (07:58):
Yeah.
Speaker 3 (07:58):
So the building that we brought into was about forty
odd years old, and when I'm looking to buy into
an apartment building, I do look for those older buildings
with the idea that they're passed that early stage where
they might be building defects from the developer or the
original builder doing a dodgy job. So buying into an
(08:21):
older building generally considered quite safe. However, when you're getting
to that age thirty forty years and not a lot
of maintenance has been done on the building, you can
run into unexpected expenses. So for our building, it needed
a new waterproof membrane on the roof to stop water
(08:41):
coming into the top floor. Really important, really expensive. So
that has been about a two million dollar job, and
each owner in the building has had to contribute, roughly speaking,
forty to fifty thousand dollars each and that is something
that many owners buying into that building were not aware
(09:03):
of at the time they bought and were not prepared for.
Speaker 1 (09:06):
Was there anything you could have done that might have
exposed that before you bought? Was there any building inspection
possible that would have shown that up?
Speaker 2 (09:15):
Yes.
Speaker 3 (09:16):
The inspection to do is to have a look at
the records that are held by the strata manager. So
these are the owners corporations or the body corporates books
and records.
Speaker 2 (09:27):
They belong to the building, and.
Speaker 3 (09:29):
They will often include things like engineers reports, builders, investigations
that the committee has arranged to take place, reports about
water leaks from residents. You might see an email from
the resident in that top floor unit saying, Hey, this
has been going on for a few months now, I'm
starting to get mold. There's something wrong with the roof.
(09:49):
Is there anything that's going to be done to fix this?
So if you kind of know what you're looking for
when you're looking at those strata books and records, then
you can go in with your eyes open and be aware,
looks like some major repair work will need to be done.
Speaker 2 (10:04):
What's the cost of that looking like, and what might
my contribution be?
Speaker 1 (10:10):
So how do you avoid finding yourself in the position
the apartment owners we've spoken about have and what should
you know about the fees you could expect to pay
all the things you can and cannot do in an
apartment compared to owning a house. Not only is Amanda
an apartment owner, she's also a strata lawyer. Amanda, let's
look at the pros and cons of owning an apartment.
(10:31):
I guess the first lure of apartment or unit living
is the price. It's often a lot more affordable, depending
on the location, than a house, right.
Speaker 3 (10:39):
Yeah, I do think affordability is the number one positive
and the reason why people are looking at apartments before
they're looking at houses.
Speaker 2 (10:48):
Now.
Speaker 3 (10:48):
Of course, that differs in different parts of the country,
and if you're looking at some parts of our big cities,
we're seeing very expensive apartments.
Speaker 2 (10:57):
But absolutely that location piece is key.
Speaker 3 (11:01):
People are wanting to live close to transport, close to amenities.
Our cities are growing up, they are not growing out,
so there are plenty more apartments than there are houses
in these areas, and that is certainly making those properties
more affordable.
Speaker 2 (11:16):
But there's a lot of other great reasons to buy
an apartment as well.
Speaker 1 (11:20):
Well, let's have a look at one of those reasons.
One is that you will have to pay fees to
the body corporate whoever's running your apartment building. But that
means they take care of most of the repairs and maintenance.
Speaker 2 (11:31):
Right, that's it worry free living.
Speaker 3 (11:34):
You don't have to be spending in your weekends doing
the back garden, mowing the lawn, painting the outside of
the house. All of those things that you might do
or you might have to pay somebody to do if
you live in a house, they are generally covered by
the body corporate. You can put your rubbish in the
bin room and not worry about it. If you're lucky
enough to have a garbage shoot, as we are in
(11:55):
our building, you can just step outside your front door
and throw your rubbish down the chute.
Speaker 2 (11:58):
That's great.
Speaker 3 (11:59):
Having a cleaner around to clean those common areas, having
secure parking, all of these things that can make living
in a city especially much more enjoyable. You get a
lot of that with apartment living for what feels like
no extra cost.
Speaker 1 (12:14):
Security is another big one, right because with the population
growth the way it is, with less people getting married,
with the less people having children, there's a lot of
single houses or couples in houses, and it's nice to
know that without that sort of extended village around you,
maybe like having the security of swipe cards to get
you into the building and security cameras. It's peace of
(12:37):
mind for people who might be doing it alone.
Speaker 3 (12:40):
So true, and in some buildings there is an on
site building manager or in our more luxurious buildings, of
concierge who's there to receive your packages as well. Definitely,
that lock up and leave lifestyle is attractive to professionals
who are traveling, to retirees who are going away on cruisers.
Speaker 2 (13:02):
To be able to just shut that.
Speaker 3 (13:03):
Door, know that if something goes wrong, you've got neighbors
you can call on, you can leave the key with,
who can check in. That is definitely one of the
big positives for apartment living as well.
Speaker 1 (13:13):
Let's have a little look at some cons for a second,
because we mentioned you pay those body corporate fees and
they take care of repairs and maintenance. But the thing
is you still have to pay fees, which you don't
have to do when you own a house, and I'm
guessing those fees will increase with the more facilities that
you might have access to, say, if your apartment building
has a pool or a gym or any of those
(13:34):
kinds of things, you might be paying some pretty steep fees.
Speaker 2 (13:37):
Yeah, it's true.
Speaker 3 (13:38):
We call those fees levees, and it's important that anyone
buying into an apartment understands that there will be regular
levies payable, usually on a quarterly basis. So that's going
to be in addition to your council rates and to your.
Speaker 2 (13:53):
Water and your electricity bills.
Speaker 3 (13:55):
And if you're in a building with those great amenities,
as you say, a gym, a pool, a billing manager,
then yes, often the levees per quarter are going to
be a little bit higher. But those are the kind
of expenses that you can probably be a cross be
aware of ahead of time.
Speaker 2 (14:12):
Where we see apartment purchases run into trouble is when
they hit unexpected expenses. So this is where my earlier example,
the roof is leaking. Theccordingly levies are generally not going
to cover that.
Speaker 1 (14:25):
The thing about owning an apartment as opposed to buying
a house is that you don't own the land that
your apartment sits on the way that you would a house.
And a lot of capital growth from people who are
investing in property comes from the increase in the land.
Is an apartment still a good investment when you look
at it from a land perspective.
Speaker 2 (14:45):
Yeah, it's a really good question.
Speaker 3 (14:46):
I think again, we come back to that location piece,
and where is it that people are wanting to live
and what does the apartment.
Speaker 2 (14:54):
Supply look like in that area.
Speaker 3 (14:56):
When you're buying into an area with lots and lots
of cookie cutter apartments that all look the same, you're
probably not going to see that capital growth. If you're
buying into a more established area where you've got some
older buildings and not a lot of room for more
buildings to go up, then you may see that capital growth.
The data coming out of our big cities is that
(15:18):
investors buying into strata often the rental yield is higher
than what you're seeing in our free standing homes.
Speaker 1 (15:24):
I guess with laws changing around the country around this
kind of thing, people do want to understand more about
being able to have a pet in an apartment complex,
because it does change people's lives to have that company,
especially if they're living by themselves. But sometimes it can
be quite restrictive. What do you need to do if
you have a pet and you're looking at buying an apartment.
Speaker 3 (15:45):
It's really important to look at the by laws or
often called the rules as well for a strata building
to check what the position is on pets. In most
states of the country now it is very hard for
strata buildings to ban residents from keeping pets, which I
think is a great thing, But there is usually an
(16:08):
application process that you'll have to go through to get approval,
and you want to make sure that you're ticking all
those boxes that might be set out.
Speaker 1 (16:15):
What other things do you find residents struggle with because
you are looking at having a relationship as sorts with
a whole bunch of other people who you are sharing
this property with. What are some other than car parking
common disputes that might arise.
Speaker 3 (16:28):
The biggest mistake that I see apartment purchases making is
that they assume buying an apartment is just like buying
a little house. It is nothing like buying a house.
When you buy into an apartment community, as you say, Claire,
you are sharing space with other people. You are buying
(16:49):
into a democratic process. Your neighbors can make decisions about.
Speaker 2 (16:55):
The way you use your property.
Speaker 3 (16:57):
So if you want to renovate the bathroom, for example,
or the kitchen, you want to add some value. Once
you've bought in, you generally need to get permission from
the body corporate and it is possible that you're neighbors
will go to a meeting and they will vote on
whether or not you should be allowed to renovate your bathroom,
and they might say no, or that you can't do
it at certain times, or you have to do it
(17:18):
in a certain way, and that can come as a
real surprise.
Speaker 1 (17:24):
The Australian buying season is now just two months away.
With the clear weather making for better curb appeal and
the garden in full bloom, real estate agents will be
making the most and holding options when the threat of
freezing rain or chili wins thin the crowd out. But
if an apartment is in your sits now that you're
better prepared for it. Amanda says, once you're in, get
(17:44):
involved and maximize the experience.
Speaker 3 (17:47):
As much as I deal with conflict day to day
and apartment buildings, ninety percent of apartment communities are operating really,
really well. My advice is be engaged in the community,
join the Strata committee, go to your general meetings. This
is probably your biggest financial investment, so pay attention to it,
(18:08):
have your voice heard, and understand what's going on so
that you can join in the process of making that
community the best it can be.
Speaker 1 (18:20):
Thanks for taking some time to feed your mind with
us today. If there's a new story you'd like us
to investigate for you, hit us up on socials. You
can find us on Instagram, threads, and Facebook, or you
can send us an email The Quiki at mammamea dot
com dot au. The Quiki is produced by me Claire
Murphy and our senior producer, Taylorstrano, with audio production by
Tom Lyon.
You're listening to a Muma Mia podcast. Mumma Mea acknowledges
the traditional owners of land and waters that this podcast
is recorded on.
Speaker 2 (00:21):
Hi.
Speaker 1 (00:22):
I'm Claire Murphy. This is Mumma MIA's daily news podcast,
The Quickie. We are now just a couple of months
away from Australia's peak property selling period. As we emerge
from our winter hibernation into the spring air of September,
Ozzie is start to get out into the property market
in larger numbers and with a housing crisis still impacting
most of the nation, many will consider buying a unit
(00:44):
or apartment before a house due to the lower entry cost.
But buying an apartment comes with its own set of
rules and risks that you need to be very aware
of before you sign on the dotted line. So today
we're speaking to a woman who knows apartments inside and
out and can get us all the pros and cons
for owning one of your own. Before we check in
with Amanda. Here's the latest from the Quikie newsroom. Wednesday,
(01:06):
July seventeen. Today marks ten years since Malaysian Airlights Flight
MH seventeen were shot down by Russian missile over Ukraine,
killing all two hundred and ninety eight passengers on board,
including thirty eight Australians. Nearly one hundred family members of
those who were lost that day will attend a commemorative
service at Parliament House in Canberra, along with diplomatic representatives
(01:28):
from countries impacted by the incident and Australian officials who
were involved in the response on that day a decade ago,
Foreign Minister Penny Wong saying those killed remain in our hearts.
The Ukrainian Ambassador to Australia says it's still important to
hold the criminals of the Kremlin to account for the shooting,
as well as the invasion of his country. A Romanian
(01:49):
court has overturned a decision to allow Internet personality in
alleged sex trafficker Andrew Tate from leaving the country. Tate
was indicted along with his brother Tristan and two women
last year for suspected human trafficking, rape, and forming a
criminal gang to sexually exploit women. In April this year,
the court in Bucharest ruled that the trial could begin,
(02:09):
which Tate appealed. Pending a ruling on the appeal, The
four suspects were banned from leaving Romania earlier this month.
The court lifted that ban, but restricted the force movements
to within the European Union. The prosecutors challenged the decision,
which led to yesterday's overturning of the travel freedom, again
restricting them to within Romania. Tate told reporters outside the
(02:30):
court that God has made a plan for him and
he's simply following his decisions, saying he's not emotionally involved
in the process, so he's just going to follow the
law and respect the Romanian judicial system, breaking with tradition.
Donald Trump has made an appearance on the first day
of the Republican National Convention, his ears sporting a white
bandage from the attempted assassination two days before, receiving a
(02:54):
hero's welcome from the party Faithful. The crowd chanted fight, Fight,
Fight as Trump entered the arena late in the evening,
referring to the word the former president mouthed as he
was helped off the stage at the rally in Pennsylvania
after he'd been shot at the gunman also so taking
the life of a member of the crowd who jumped
over his family.
Speaker 2 (03:12):
To protect them.
Speaker 1 (03:14):
Trump named his running mate and Vice president candidate J. D.
Vance from Ohio.
Speaker 2 (03:18):
On the night.
Speaker 1 (03:19):
Vance is the first millennial to ever appear on a
presidential ticket. The movie that saw Alec Baldwin face caught
for the shooting death of cinematographer Helena Hutchins is being finished,
but the scene that saw the tragedy unfold has been cut.
The Western was being filmed in New Mexico in twenty
twenty one when Baldwin was rehearsing, drawing the gun and
pointing at the camera where Hutchins and director Joel Susa
(03:42):
was standing. Baldwin pulled the trigger, not knowing there was
a live round inside. The bullet discharged, killing Hutchins and
seriously injuring Sousa. The camera wasn't rolling at the time.
A criminal charge of involuntary manslaughter against Baldwin was dismissed. However,
there are still civil lawsuits pending from Hutchins's parents and
her sister. Rust returned to filming last year with Hutchins's
(04:04):
husband and now widow, Matthew on board as an executive
producer after he reached a settlement with the film makers.
The film is now finished, but the scene in the
church where the shooting unfolded is not included in the
final cut. That's what's going down around the globe today. Next,
if you're thinking about buying an apartment because the house
is just way too far out of the budget, we'll
get you across everything you need to know before you
(04:26):
take the plunge. A recent story from an apartment block
in Melbourne is sadly becoming more common. The Frankston South block,
(04:46):
where residents purchased individual apartments for around three hundred and
sixty thousand nearly twenty years ago, is now costing them
tens of thousands of dollars more in repairs, with some
saying their apartments are now worth nothing. The thing is
they can't not pay the money they're obligated to as
part of special levees strata fees. They found out just
(05:08):
two weeks before Christmas twenty twenty three via email from
the local council that their apartment building was now subject
to an emergency works order. Their homes posed a danger
to life arising out of the conditions of the building.
There'd been multiple balcony collapses. Water leagues had rotted the
carpet and gotten into the structure to the point that
(05:29):
some had mushrooms growing out of the walls, there were cracks,
black mold, and the underground car park had started to collapse.
It's estimated the cost to repair the building is nine
million dollars. The majority of that will be to replace
the cladding on the outside due to it being made
from a flammable material. While the builder behind the apartment
block has since been suspended by the Victorian Builders Association
(05:52):
and had his license canceled, he is not held responsible
for the repayments to the apartment owners, who News dot
Com or reporting have now just been sent a five
hundred dollars land tax bill to pay on top of
the repair bills for apartments they can no longer live in,
and their story isn't an isolated one. Earlier this year,
a newly built set of nine hundred apartments in Sydney's
(06:15):
Macquarie Park were also told they're living in a building
that's under threat of collapse due to the concrete slab
in the basement being defective. And in January, the residents
of Mascot Towers in Sydney's Inner South were offered a
settlement after they were forced to evacuate the complex due
to the amount of defects, they haven't been able to
live in them for years. Amanda Farmer knows how this
(06:37):
feels all too well. She's been an apartment owner for
many years, but found out recently that her most recent
purchase needed some unexpected work.
Speaker 3 (06:45):
I bought my first apartment in my twenties. I was
lucky enough at that stage to be able to afford
an apartment. I have to say that's about twenty years
ago now, and since then have bought and sold a few,
lived in a few, both as.
Speaker 2 (06:59):
A tenant and as an owner.
Speaker 3 (07:01):
And the apartment that I currently own I bought together
with my husband about six years ago and it is
in Bondai Junction in Sydney.
Speaker 1 (07:09):
Perfect great location. Apartment living's pretty popular around Bonde, isn't.
Speaker 3 (07:14):
It It is and it was all about the location
when we decided to move to an apartment. It is
a three bedroom apartment and our little boy was six
years old when we moved in, so we really enjoyed
having that extra space right across the road from a
park close to that awesome westfield, lots of ease of
access to transport and great people, great culture around.
Speaker 2 (07:38):
So we've really loved being in that area.
Speaker 1 (07:40):
What happened though for you as an apartment owner when
you found out that there were some major repairs required
on the apartment that you owned at the time. Can
you talk us through how you found out, how much
you had to pay to go towards those repairs, and
what you learned from that experience.
Speaker 2 (07:58):
Yeah.
Speaker 3 (07:58):
So the building that we brought into was about forty
odd years old, and when I'm looking to buy into
an apartment building, I do look for those older buildings
with the idea that they're passed that early stage where
they might be building defects from the developer or the
original builder doing a dodgy job. So buying into an
(08:21):
older building generally considered quite safe. However, when you're getting
to that age thirty forty years and not a lot
of maintenance has been done on the building, you can
run into unexpected expenses. So for our building, it needed
a new waterproof membrane on the roof to stop water
(08:41):
coming into the top floor. Really important, really expensive. So
that has been about a two million dollar job, and
each owner in the building has had to contribute, roughly speaking,
forty to fifty thousand dollars each and that is something
that many owners buying into that building were not aware
(09:03):
of at the time they bought and were not prepared for.
Speaker 1 (09:06):
Was there anything you could have done that might have
exposed that before you bought? Was there any building inspection
possible that would have shown that up?
Speaker 2 (09:15):
Yes.
Speaker 3 (09:16):
The inspection to do is to have a look at
the records that are held by the strata manager. So
these are the owners corporations or the body corporates books
and records.
Speaker 2 (09:27):
They belong to the building, and.
Speaker 3 (09:29):
They will often include things like engineers reports, builders, investigations
that the committee has arranged to take place, reports about
water leaks from residents. You might see an email from
the resident in that top floor unit saying, Hey, this
has been going on for a few months now, I'm
starting to get mold. There's something wrong with the roof.
(09:49):
Is there anything that's going to be done to fix this?
So if you kind of know what you're looking for
when you're looking at those strata books and records, then
you can go in with your eyes open and be aware,
looks like some major repair work will need to be done.
Speaker 2 (10:04):
What's the cost of that looking like, and what might
my contribution be?
Speaker 1 (10:10):
So how do you avoid finding yourself in the position
the apartment owners we've spoken about have and what should
you know about the fees you could expect to pay
all the things you can and cannot do in an
apartment compared to owning a house. Not only is Amanda
an apartment owner, she's also a strata lawyer. Amanda, let's
look at the pros and cons of owning an apartment.
(10:31):
I guess the first lure of apartment or unit living
is the price. It's often a lot more affordable, depending
on the location, than a house, right.
Speaker 3 (10:39):
Yeah, I do think affordability is the number one positive
and the reason why people are looking at apartments before
they're looking at houses.
Speaker 2 (10:48):
Now.
Speaker 3 (10:48):
Of course, that differs in different parts of the country,
and if you're looking at some parts of our big cities,
we're seeing very expensive apartments.
Speaker 2 (10:57):
But absolutely that location piece is key.
Speaker 3 (11:01):
People are wanting to live close to transport, close to amenities.
Our cities are growing up, they are not growing out,
so there are plenty more apartments than there are houses
in these areas, and that is certainly making those properties
more affordable.
Speaker 2 (11:16):
But there's a lot of other great reasons to buy
an apartment as well.
Speaker 1 (11:20):
Well, let's have a look at one of those reasons.
One is that you will have to pay fees to
the body corporate whoever's running your apartment building. But that
means they take care of most of the repairs and maintenance.
Speaker 2 (11:31):
Right, that's it worry free living.
Speaker 3 (11:34):
You don't have to be spending in your weekends doing
the back garden, mowing the lawn, painting the outside of
the house. All of those things that you might do
or you might have to pay somebody to do if
you live in a house, they are generally covered by
the body corporate. You can put your rubbish in the
bin room and not worry about it. If you're lucky
enough to have a garbage shoot, as we are in
(11:55):
our building, you can just step outside your front door
and throw your rubbish down the chute.
Speaker 2 (11:58):
That's great.
Speaker 3 (11:59):
Having a cleaner around to clean those common areas, having
secure parking, all of these things that can make living
in a city especially much more enjoyable. You get a
lot of that with apartment living for what feels like
no extra cost.
Speaker 1 (12:14):
Security is another big one, right because with the population
growth the way it is, with less people getting married,
with the less people having children, there's a lot of
single houses or couples in houses, and it's nice to
know that without that sort of extended village around you,
maybe like having the security of swipe cards to get
you into the building and security cameras. It's peace of
(12:37):
mind for people who might be doing it alone.
Speaker 3 (12:40):
So true, and in some buildings there is an on
site building manager or in our more luxurious buildings, of
concierge who's there to receive your packages as well. Definitely,
that lock up and leave lifestyle is attractive to professionals
who are traveling, to retirees who are going away on cruisers.
Speaker 2 (13:02):
To be able to just shut that.
Speaker 3 (13:03):
Door, know that if something goes wrong, you've got neighbors
you can call on, you can leave the key with,
who can check in. That is definitely one of the
big positives for apartment living as well.
Speaker 1 (13:13):
Let's have a little look at some cons for a second,
because we mentioned you pay those body corporate fees and
they take care of repairs and maintenance. But the thing
is you still have to pay fees, which you don't
have to do when you own a house, and I'm
guessing those fees will increase with the more facilities that
you might have access to, say, if your apartment building
has a pool or a gym or any of those
(13:34):
kinds of things, you might be paying some pretty steep fees.
Speaker 2 (13:37):
Yeah, it's true.
Speaker 3 (13:38):
We call those fees levees, and it's important that anyone
buying into an apartment understands that there will be regular
levies payable, usually on a quarterly basis. So that's going
to be in addition to your council rates and to your.
Speaker 2 (13:53):
Water and your electricity bills.
Speaker 3 (13:55):
And if you're in a building with those great amenities,
as you say, a gym, a pool, a billing manager,
then yes, often the levees per quarter are going to
be a little bit higher. But those are the kind
of expenses that you can probably be a cross be
aware of ahead of time.
Speaker 2 (14:12):
Where we see apartment purchases run into trouble is when
they hit unexpected expenses. So this is where my earlier example,
the roof is leaking. Theccordingly levies are generally not going
to cover that.
Speaker 1 (14:25):
The thing about owning an apartment as opposed to buying
a house is that you don't own the land that
your apartment sits on the way that you would a house.
And a lot of capital growth from people who are
investing in property comes from the increase in the land.
Is an apartment still a good investment when you look
at it from a land perspective.
Speaker 2 (14:45):
Yeah, it's a really good question.
Speaker 3 (14:46):
I think again, we come back to that location piece,
and where is it that people are wanting to live
and what does the apartment.
Speaker 2 (14:54):
Supply look like in that area.
Speaker 3 (14:56):
When you're buying into an area with lots and lots
of cookie cutter apartments that all look the same, you're
probably not going to see that capital growth. If you're
buying into a more established area where you've got some
older buildings and not a lot of room for more
buildings to go up, then you may see that capital growth.
The data coming out of our big cities is that
(15:18):
investors buying into strata often the rental yield is higher
than what you're seeing in our free standing homes.
Speaker 1 (15:24):
I guess with laws changing around the country around this
kind of thing, people do want to understand more about
being able to have a pet in an apartment complex,
because it does change people's lives to have that company,
especially if they're living by themselves. But sometimes it can
be quite restrictive. What do you need to do if
you have a pet and you're looking at buying an apartment.
Speaker 3 (15:45):
It's really important to look at the by laws or
often called the rules as well for a strata building
to check what the position is on pets. In most
states of the country now it is very hard for
strata buildings to ban residents from keeping pets, which I
think is a great thing, But there is usually an
(16:08):
application process that you'll have to go through to get approval,
and you want to make sure that you're ticking all
those boxes that might be set out.
Speaker 1 (16:15):
What other things do you find residents struggle with because
you are looking at having a relationship as sorts with
a whole bunch of other people who you are sharing
this property with. What are some other than car parking
common disputes that might arise.
Speaker 3 (16:28):
The biggest mistake that I see apartment purchases making is
that they assume buying an apartment is just like buying
a little house. It is nothing like buying a house.
When you buy into an apartment community, as you say, Claire,
you are sharing space with other people. You are buying
(16:49):
into a democratic process. Your neighbors can make decisions about.
Speaker 2 (16:55):
The way you use your property.
Speaker 3 (16:57):
So if you want to renovate the bathroom, for example,
or the kitchen, you want to add some value. Once
you've bought in, you generally need to get permission from
the body corporate and it is possible that you're neighbors
will go to a meeting and they will vote on
whether or not you should be allowed to renovate your bathroom,
and they might say no, or that you can't do
it at certain times, or you have to do it
(17:18):
in a certain way, and that can come as a
real surprise.
Speaker 1 (17:24):
The Australian buying season is now just two months away.
With the clear weather making for better curb appeal and
the garden in full bloom, real estate agents will be
making the most and holding options when the threat of
freezing rain or chili wins thin the crowd out. But
if an apartment is in your sits now that you're
better prepared for it. Amanda says, once you're in, get
(17:44):
involved and maximize the experience.
Speaker 3 (17:47):
As much as I deal with conflict day to day
and apartment buildings, ninety percent of apartment communities are operating really,
really well. My advice is be engaged in the community,
join the Strata committee, go to your general meetings. This
is probably your biggest financial investment, so pay attention to it,
(18:08):
have your voice heard, and understand what's going on so
that you can join in the process of making that
community the best it can be.
Speaker 1 (18:20):
Thanks for taking some time to feed your mind with
us today. If there's a new story you'd like us
to investigate for you, hit us up on socials. You
can find us on Instagram, threads, and Facebook, or you
can send us an email The Quiki at mammamea dot
com dot au. The Quiki is produced by me Claire
Murphy and our senior producer, Taylorstrano, with audio production by
Tom Lyon.
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