Hi!
Recently I was left a full block of 12 strata units under a company name in NSW.
I’m very much a rookie at property investing and have a few questions that I thought I’d ask here. (There always seems to be an answer on here!)
If anyone could please give me an answer to any of these questions I would really appreciate it.
AND if you dont know the answer but know which professional I could speak to for an answer I would appreciate knowing what kind of person I need to speak to.
Thanks.
All of the units are strata units. All rented. I own the whole block without a loan.
The block was purchased many, many years ago and the units made strata in the 90s. The property manager has told me there are no registered by-laws and he has been going by a set of model by-laws.
The building is very old and you could even say slightly run down.
My questions are:
– Do I need to employ a strata manager? From my current findings I’m thinking I dont.. However I dont know anything about strata and I think I should get some real by-laws for the building. How would I go about this?
– How do I know if my building is as up to date in legislation as it needs to be for proper insurance cover etc…?
– Can I legally be renting if my building potentially doesnt comply to current legilslation?
– How can I stay up to date on laws and legislation so I wont get in any trouble from anyone (insurance, tenants, etc..)
– I’m sure that by being built in the 1930s my building wont have to fit every modern regulation. How do I tell which I need to follow and which are only for new developments to follow?
– What are the kinds of professionals I can speak to for more information on these questions?
If anyone needs ANY more information to help me answer my questions just let me know and I’ll provide it.
Thanks so much.
Hello and thanks for your post. That is quite a gift that you have inherited.
Before answering your questions, I’d encourage you to think about the investing strategy you would like to pursue (income or growth), together with your available funds, risk appetite and skill. Once done, then consider how this asset fits into, and meets, your needs. The building ought not to become a burden for you, but rather be a blessing!
Reading your post it seems you are in ‘quite deep’, so to speak, re: property investing, without having the benefit of time and experience to ‘scale up’. You would be wise then to lean on qualified and experienced advisers to guide you over the next 12 – 24 months.
To that end, I feel your question also largely contains your answer re: advisers. Here are some further comments:
1/ Your strata adviser seems to be able to guide you, if you feel s/he/they are qualified and experienced. If not, perhaps go for a walk in the area and see if there are any signs on buildings saying ‘managed by’ and call them up for guidance and a quote. Have you googled ‘strata services + the area’? As to whether you have to employ one, I’d be surprised, but that is a legal question to ask a lawyer.
2/ A professional building inspection sounds like a good idea, doesn’t it? You can include in the scope an opinion about whether the building meets the tenancy law requirements in respect to qualify and safety.
3/ Any insurance broker worth a pinch of salt will tell you about your insurance options. Having the building inspection done first will assist insurers to understand the risk.
4/ You may like to consider getting a quantity surveyor to provide you with a depreciation report, or at least see if you qualify for depreciation or building write off. They can also provide you with a Replacement Cost Assessment to help you understand how much you should insure the building for.
5/ I would highly recommend using a professional property manager to help you ‘stabilise’ the asset both re: condition and tenancy. I wonder, what would you do if there was a substantial capital works bill of, say, $300k plus (roof, etc.)? As I teach, the answer needs to depend on your time, money, skill and risk tolerance.
All the best,
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Thanks so much Steve. I’ve been looking over your answers and having a look into some of the things you’ve mentioned and its really, really helpful.
Thanks for the guidance.
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