All Topics / Help Needed! / Ridiculously overpriced Strata Fees

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  • Profile photo of RH84RH84
    Participant
    @rh84
    Join Date: 2014
    Post Count: 5

    Hi fellow investors,

    I need your expertise to help me determine if iam correct in thinking that my stata cost are way too high or if it correct as the price its set at. How can I confirm this without directly refering to my Strata title management as they don’t really provide me with solid answers.

    Location is Rhodes, Sydney and the size of the apartment is approx 110 sq metres 2 bedder, 1 car spot and im currently paying $1708 per quarter. There are 4 buildings that comprise of the complex and there is alot of garden beds, shared gym, pool, sauna areas etc. the strata was originally $1200 per quarter at the beginning of 2011 and by mid 2012 there was a sudden announcement that they had ‘under budgeted’ when the complex was first built so now they have to ‘balancance’ it out hence the massive jump to $1600. From there its slowly crept up to $1708.

    They have sent the annual budget forms in an attempt to ‘explain and justify’ where the money goes but in all honesty its quite hard to understand and account for as an average apartment owner. Ive even tried to call fair trading/onbudsman but even they were not of any help.

    What are my options and how would you suggest to investigate if what im paying is the correct amount and ive just struck some bad luck or if im actually over paying. Also is there any reason why ‘Strata title search’ never found there to be irregularities like strata being underbudgeted? Are they responsible for determining these types of problems?

    If it does turn out that im stuck with this problem it may be a reason to sell in the near future as opposed to turning this PPOR into an IP within the next few years as originally planned.

    This is a very frustrating situation that i have been dealing with the last few years so any help would be greatly appreciated. Thanks.

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    That’s a common problem when you look at multi level sites with shares pools, gyms, saunas, tennis courts etc. Strata costs will only go one way too, up.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Yeah it’s an unfortunately reality….and rarely will strata fees go down :-( They always seem to only go in one direction.

    I remember the fees for our first IP starting at $300 p.q and the bill I got the other day was close to $900.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    I have a few clients who purchased in NQ thru a so called BA guru where the BC fees are the same as they are getting each year in rent.

    Then then have the Council Rates and of course interest on the loan.

    Complex is lovely and has a pool but of course as you can live in the place the tenants and holiday makers are enjoying it at your expense.

    If the complex is new then the developer will have prepared the budget and guess what they will have underestimated as it doesn’t look good when you are trying to sell the place to be too honest with the actual expenses.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Adrian CahillAdrian Cahill
    Participant
    @adriannqld
    Join Date: 2003
    Post Count: 128

    I have a place in NQ as well, so do some friends. Our costs are rising but far less than the ‘resort’ style complex’s. While I can’t compare NQ to Sydney, as Richard or Corey said, your paying so much for the Gym, Spa, Sauna…….

    We did reduce ours recently though. A owner is now doing most of the maintenance and doing a far better job which in turn reduces repair/replacement bills.

    Adrian Cahill | AdrianCahill.com Personal Development Expert
    http://adriancahill.com/from-investor-to-coach/
    Email Me | Phone Me

    Here since 2002, however things have evolved over the years.

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