When a land title is shared between units or an apartment building, the owners of the properties make up a group called the ‘Owners Corporation’ (sometimes referred to as body corporate or Strata Corporation).
Some property investment clients do not like the idea of paying a strata fee for their investment property and cite house and land packages as maybe a better option. This can be false economy. Remember a big part of the cost of Strata Fees is building insurance so if you are in a Body Corporate there is no individual building insurance to concern yourself with. In a house and land, this cost could easily be more than $1600 per annum. Add on to this the general outside maintenance costs of house and land plus say a $10,000 to $12,000 bill for a new outside paint job and roof repair every 10 or 12 years ( these ‘outside’ costs would all be covered by a Body Corporate), then a good well-ruin strata can be just as inexpensive as a property without a body corporate.
The owners elect a Body Corporate committee to handle administration or upkeep of the site including matters regarding common land. Usually this responsibility is referred out to a property management company for a fee. The benefits of an owner’s corporation include:
- the value and integrity of your investment is protected through frequent maintenance and landscaping
- you are insured against accidents that occur on the common property (eg: shared driveways)
- you may have access to very competitive building insurance pricing, as all properties combine to get a reduced bulk rate. In this case, owners would only need to secure an additional contents policy to complete their insurance needs on the investment.
