Know your monthly strata fees and what’s included
A client recently told me they preferred to buy in a strata that had fewer amenities so that their monthly maintenance fees would remain low. That got me thinking perhaps we should be discussing maintenance fees and what they include.
Buying a strata comes with the benefit and sometimes downfall of sharing costs. A large majority of monthly maintenance fees are the overall insurance that the strata carries for the building as a whole. As a property owner, you carry your own content insurance and as an investor, you’ll carry tenant insurance as well as ensuring your tenant carries content insurance.
Most larger developments also have a property manager that takes care of the day to day dealings of the strata as well as arranging the meetings and maintaining the financials.
Other things that can also be included in strata fees are:
- Hot water
- Amenities; such as swimming pool, gym,
- Concierge and more.
While I did understand where my client was coming from, I also said it’s not a bad idea to consider where you are buying and what buyers will expect on resale. For example, if you live in a condo downtown, it’s almost a given that you should have a pool, a gym, and Concierge. Even though you may not use the amenities, it will help you on resale when it’s time to sell.
With the depreciation reports required for stratas, we are even seeing boosted monthly fees for a specific amount of time, so strata can build up a fund for an expenditure.
Bottom line is to know exactly what’s included in your strata fees so you can figure out your cost each month. Low strata fees aren’t always a good thing.