Understanding The Concept Of Strata Titled Property
Strata managers often hype up strata titled property as a better option, but are they really? Strata simply means that one owns a house, a portion in a larger dwelling. On a vertical plane, land is often subdivided into many portions. Strata titled land involves having a title of a portion of that subdivided land. Strata units come in many groups. The land can be subdivided into groups ranging from two per property to a hundred at a time. They are not free standing, since every household shares the walls, ceiling and floors with other dwellers. Examples of strata tied properties are apartments, town houses, or duplex villas. There are many advantages and disadvantages of owning strata titled property.
The biggest advantage is the cost. Compared to the cost of buying a house, the cost of strata titled property is relatively low. This is one of the major attractions of these types of property. The cost reductions do not stop there, though. Unlike wills and estates lawyers seek professional guidance costs are very low. Most of the maintenance cost is covered by strata levies, which are often paid on a quarterly basis. Looking at it from an investment point of view, there is a huge financial incentive when erecting strata housing for rent or sale. The low prices and maintenance cost result in high demand over the years, which in turn translates to high capital growth. It is perhaps because of this that bank lending rates when dealing with strata titled property are very favorable. Getting financing for such a real estate development is very easy, with some banks offering up to a 95 per cent loan to value ratio depending on the nature of the suburb in which the property is to be built.
However, when considering strata titled property, one must also keep in mind the risks involved. To be on the safe side, consider the services of a strata lawyer to make the process smooth. Before getting into an agreement for the property, make sure everything is clearly defined. Have the managers of the property outline the strata levies involved, and what they cater for. In such a living situation, one cannot avoid neighbors. Know the people who live in the same strata titled property, to avoid getting stuck with noisy neighbors. If one person decides to sell their property fast, which mostly happens due to personal problems like divorce, there should be ways through which the rest of the owners remaining are protected from depreciation of their property.
The concept of strata is thought to have started about 50 years ago. Today, there are hundreds of thousands of strata titled property, both domestic and commercial. In the beginning, the closest idea to strata was having shares in a company that owned a building. With these shares, one was guaranteed exclusive use of a residential unit. However, this deal did not give ownership completely, and banks were therefore not keen to lend money on such a deal. Strata titled property became the answer to ownership and bank lending.