The importance of a Strata Inspection Report, how to get it done and why every buyer needs one to make a safe property purchase
When you consider purchasing property, you often consider the location, the price, and the community. We strive to get the best deals, or at least get something affordable. But we often do so without looking at the bigger picture.
There is more to a building or property than just location and cost. There are things like property value, plumbing, and insurance that you may not bother investigating but is vital information for you, or any tenant’s stay on your property. Without considering these essential factors, you could end up in losses within months after purchase. Vital Building and Pest Inspections offers a range of services to put your mind at ease when buying property, including Strata Inspection Reports which we consider absolutely essential for property purchases.
Strata Property Purchase Mistakes
In 2016, two people sought advice from a property research and investment firm. Mark has dreamt of buying property to provide for his wife and growing family and ended up spending $504,000 for a flat. A year later, he sold the same flat at a loss. It was valued at $450,000 by the bank during settlement.
For Paul, it was a different story. He purchased a flat costing half a million dollars with a rental guarantee. He thought he was getting enough money until he realised that after the rental guarantee, the value of his property dropped causing him to lower his rent. He claims that the faster the tenant turnover was, the lower the rent became. His real estate agent even told him to drop the prices further so he can have more tenants.
These are just two cases of people who reasonably depended on who they thought were the right experts for help, and did not benefit from it. Who could blame them? Anyone with little to no background could have done the same. Clearly, there are so many things that could go wrong in a residential or commercial property investment. So before you go ahead and sign the dotted line, consider first getting a strata inspection report.
The word ‘strata’ means multi-level building. Persons who own a multi-level apartment building or a horizontal sub-division with a shared common space have title over the property called a strata title.
The strata title system is great because it allows individuals or small businesses to own an actual section or part of a property or lot as well as co-own common areas. The strata title system replaced the company title system in 1961. The latter didn’t necessarily acknowledge ownership over a part of the lot but instead gives individuals a share in the company which owns the building and grants them exclusive use of part of the property.
A strata inspection report is a report that you need whenever you are considering to buy an apartment, a townhouse or a villa. It covers not only strata titles but also company or community titles regardless of commercial or residential use. The report includes the history of the building, existing disputes over the property, financial status, past and future building plans, levies, mortgage, insurance and other pertinent information regarding the property within two years.
Benefits of a Strata Inspection Report
Buying a strata inspection report is a cost in itself. It is not an investment people are often open to spending on, but strata inspection reports are minimal compared to the significant financial investment in the property you want to own and potentially earn extra money from. Strata inspection reports are guides that are supposed to give you the right information that brokers or even financial advisors refuse to tell you. Here are some well-known benefits of having a strata inspection report:
Helps you see the financial standing of the strata scheme
Any broker can show you great amenities, and talk you into considering the place because of its location and value. However, do you know about the financial position of the building or any existing disputes? A strata inspection report helps you with that. With any property you own, the decision to buy may not just be because you want a home to live in. Eventually, it may be a property you would consider selling and therefore must be assessed as a safe investment.
Looking into the strata inspection report gives you a peek of how well managed the premises are. If you quickly purchase property without looking at the financial aspects of it, you could end up buying at a high price but end up selling it at a loss later on. If you end up having it rented, rent prices from mismanaging could also plummet down, leaving you with more headaches and little to no profit.
Allows you to see properly if they comply with safety laws
What’s good about the strata inspection report is it gives you all the things you need to know – not just about the unit you want to purchase, but the building itself – does it comply with safety laws?
Are the fire exits safe and well maintained? Do the smoke alarms work? Do the smoke alarms have a carbon monoxide detector? Are their wirings old and need replacing? Whether it’s for your business or your home, these are important questions that can only be answered by a comprehensive strata inspection report.
Each strata scheme is different from property to property. When you have a strata inspection report, you could see the voting rights of each owner, what meetings they go over, what concerns they want to focus on, and how they administer the property that you would be buying. The by-laws also discuss owners’ rights and responsibilities, including complaints and garbage disposal.
If you do not pay attention to these things, you may realise once you step in that there are matters that you aren’t okay with, but you would not be able to change anymore. No matter how big or small these are, remember that investing in property is not easy or cheap. If this information is something you consider a deal-breaker and you have bought the property anyway, you may end up regretting this purchase.
Overall, what is truly great about a strata inspection report is not just knowing important information, it also enables you to make a decision based on the detailed facts, and not a broker or agent who may not always have your best interest at heart.
Strata Inspection Report in Sydney
For your vital strata inspection report, or other building and pest inspection needs, choose a company that will put your wellbeing at the forefront. Choose Vital.
Vital Building & Pest Inspection is a Sydney-based company that has helped many families and individuals see the problems in their homes and buildings. Rest assured, you can trust our team to offer practical and reasonable solutions for your inspection needs. Protect your property and your hard-earned money and contact Vital Building & Pest Inspection now!