Body Corp Fees

Queensland does seem to have higher BC fees. Also those with pools and lifts are higher as maintenance is higher.

$900pq is a big chunk out of the rent. Not my idea of good value.

Townhouses can be a good investment, depending on what your strategy and goals are. But high BC fees eat into your yield so take that into account.

Hi Linda

When it comes to townhouses / units that are strata titled, you need to keep in mind that the levies you pay per quarter go towards the general maintenance and upkeep of your property.

Eg. If the gutters start leaking on a strata tiled townhouse, the body corporate pays to have the repairs completed.  Conversely, if the gutters started leaking on a free standing torrens title house, then you as the owner would be putting your hand in your pocket to pay for the repairs.

The way i see it (its a pretty simple way of seeing things) is with townhouses / units, i pay in advance each quarter for maintenance as opposed to a lump sum at the time of repair…

In regards to are townhouses a good investment, it all comes down to the numbers…

Pro's – Generally easy to maintain (body corporate takes care of gardens, most building issues etc)

– In the right area, they do rent well.   (A lot of young professional couples etc don't want to have to maintain a big back yard, just want somewhere to sleep that is close to work / major amenities)

Cons – You don't have full control over your investment (Eg. Bi-Laws / Exec Committees will dictate what / if any modifications you can make to the building – think Patios or Parking Areas)

– A poorly run body corporate can spend a lot of money on things that just aren't necessary (Eg. Having a electrician attend site to replace a $2 light bulb over the main entrance, total cost including call out $100).    A well run or active executive will often have an owner who is a little bit handy / happy to change the odd light bulb etc saving a heap of money over time.

If you do go down the strata pathway, make sure you order a strata report.

How much money they have in the bank and how many / if any mid year exec meetings were held and what was discussed will reveal a lot !

Matt

Hi Linda

If buying a townhouse, it's best (in my opinion anyway) to buy into smaller developments. That way, you're not competing with other owners in the complex when selling/renting when the time comes (often you'll see multiple properties from within the same large complexes for sale or rent at the same time). Also, if a couple of properties within the complex sell cheaply – that can cause the values of other properties within the complex to decrease as well.

39 isn't a huge number but it's not really boutique either. However, some of those gated complexes hold 100+ properties – they're the ones I wouldn't bother with personally.

Cheers

Jamie

Hi Linda

Wow wow right there. Did you say 39 in the complex? if so i would be running a mile.

I own 3 blocks of units in Brisbane and the 1 that is strata titled control the body corporate myself.

I would never buy into a block of 39 as you loose total control. Those BC levies are only going 1 way and that is upwards.

If there are a few for sale doesn't that tell you something.

I am not sure of your budget or the sale price but if you are after a combination of growth and yield i guarantee you could do better by looking elsewhere.

Cheers

Yours in Finance