Why Units Make Good Investment Properties
Some people are reluctant to purchase a unit, often because the body corporate levies are seen as an “extra” charge. However, most of your levies are just a different way of paying the usual expenses of owning property.
There are many units around with levies under $2,500.00 per year. Generally, your levies cover expenses such as:
Building insurance
Common property public liability insurance
Mowing/gardening of the common property
Long-term capital repairs and maintenance (such as driveway repairs, roof replacement and exterior painting)
Driveway lighting
Depending on your complex, this may also include:
Mowing/gardening of your courtyard
Pool chemicals and maintenance
Water usage rates
Security gate operation and maintenance
Termite/pest inspections and/or treatments
Although there may be other expenses such as a Body Corporate Manager that you would not otherwise have to pay, at the end of the day it is hard to get the same service in a house for the same price. You would be lucky to get your mowing and insurance for $1,500.00 per year, let alone your contribution to long term maintenance.
Beyond looking at the yearly levies, there are other savings by owning a unit. Council rates are cheaper – in Bundaberg, this is by about $150.00 per half year. You may also have friendly neighbours who will assist in keeping an eye on your property and your tenants.
If you have a body corporate manager, you also have someone keeping an eye on the compliance and administration of your property. They will
In addition to this, the long-term maintenance of a unit is cheaper than an ordinary house. This is partly because larger jobs are often given a discount from tradesmen, and partly because when you share a wall with the unit next door, there are less walls and gutters per unit to be maintained. When you also consider that you get to share, or completely avoid, the responsibility of getting quotes and paying these invoices, there are a lot of financial advantages to owning a unit.
Compare this to a house at the lower-end of the market. Usually, this will be an older home that is getting closer to needing major repairs, such as painting, new gutters, roof or fences, which you will have to fully fund as no one else has been putting money aside for this.
Of course, there are disadvantages to owning a unit, in particular you do not have full control over the property because other owners have a say. The savings are also not present in every complex – levies can be a lot higher in properties that have lifts, on-site managers or other expensive facilities. However, it is worth considering units when purchasing an investment property, as they may be cheaper overall and the expenses are spaced out in regular payments.
Note: All figures and information in this article is of a general nature. When considering purchasing a unit, you should speak to the committee and/or the body corporate manager to check on the financial obligations of that particular property.
Lucinda Doughty
Business Manager
