Strata Admin fund is in debt

If $600 makes the difference between you buying and not buying a property you are in the wrong game.

What about the $7000 stamp duty plus solicitors costs, bank charges. Have you taken these into account?

The increased levies would be worth considering though. Admin funds usually run close to the mark. No use having lots of excess funds sitting around. What about the sinking fund. How much is in that. That's the one that you want a bit of money in.

Catalyst is right – it’s the sinking fund that you’d want to see some funds in.

Use it as a point of negotiation with the vendor.

Cheers

Jamie

I would be asking why the administration find is in deficit & why a motion hasn’t been made to transfer funds between the accounts – funds cannot be in deficit as it is in breach of the strata act.

What is the 5 year budget for the sinking fund?

Are unit owners in arrears? What is the strata management doing about it?

I wouldnt let a probably necessary increase in the strate fees dissuade you from purchasing the property. The mix is always making sure that the strata fees and the water bills and the maintainence of the unit is less than what you are coughing up in rent. Thats how you make money on an investment.

HOWEVER there are lots of owner schemas (body corps, owner corporations) where they run things at a barest minimum and expect that they are saving money ! THATS WRONG TOO ! If you have a house .. every couple of years the roof may need attention .. the fence may need a new coat of paint .. etc etc. Why shouldnt you expect the same from your owner management?

Too little and you end up treating the property badly anyway. I have a couple of units in one block in Greater Dandenong which was bought cheap. And to start off .. its body corp (now owners corporation in VIC) was about 375 bucks a quarter. However this had been carried across from it being a el-cheapo set of units (around 70k a unit) in about 1997. Now this also means that the property was WAAAY underinsured. If the block had burnt down .. i would have got the 70k it was insured for .. instead of the 280k its now worth. Can you see a subtle difference?

The point is .. i've got to the owners meeting and requested that a block that is so used to being treated at one level (under 150k) start being treated at another level (the nearly 300k that it is). It means proper care .. better management .. revaluation to proper insurance levels and an increase in body corp fees per quarter to $530 per quarter. Its a big jump .. but then the properties have quadrupled in value since the last assesment. Its about time they were respected as such.

With a minor debt in the management sink fund, i wouldnt be panicking about anything. If the genuine figures add up, buy it.

Lots of body managements run underfunded and undermanaged. I'd be suggesting the idea that they are raising the fee to stabilise the debt a good sign that the management firm is now taking control of the situation and moving on. And good strata management is a key strategy to passive owner property management.

Probably right, as neither yourself nor the agent actually has a relationship with the strata manager. So direct you queries back to the selling agent.