Strata property has its advantages but you don’t have to ask around for long before you find a horror story or two relating to nasty repair bills that pop up unexpectedly.
This happened recently to a group of nine Bronte apartment owners who were in the process of planning for future capital works that were required for their building.
Typical Bronte building maintenance costs came up, such as replacing the windows and doors, brickwork repair, painting, and an outstanding fire upgrade. To add to the costs, the owners were also told that their roof would also soon need replacing.
Strata bill shock!
For many of the owners, funding this level of capital works was not something they could pay outright.
With the expected bill of $450,000, the owners of each unit were looking at having to fork out $50,000 for the repairs, which would be collected through a special levy - payable quarterly into a sinking fund.
It’s the kind of horror story no strata owner wants to get caught up in...
An unexpected windfall…
Strata Development Specialist, Warren Livesey from Next Level Sydney, was introduced to the apartment owners in order to review the remedial scope of works. He prepared a Property Potential Report to highlight to the owners a variety of ways they could pay for the repair costs - without having to put their hands in their pockets!
From the report, it became evident to the owners they could:
● Build into the roof above the top floor apartments
● Convert the large shared laundry into a separate apartment
● Add balconies out the front and rear of the building
All of this created value to the property of approximately $2.5 million, without involving a developer.
So how could all this be done without the owners having to put up their own money?
The project is being funded by a strata loan, which will cover the design, planning and construction. Even better, the strata loan will not need to be paid back until the additional apartment is sold.
Funds for the build will also be generated from the top floor owners, who will be purchasing the roof space from the owner’s corporation. With this additional space, they will add an additional bedroom, bathroom, and inverted balcony.
The added value to the building will be split between the nine apartment owners, based on their Unit Entitlements.
A WIN-WIN for all
The building gets upgraded, all the capital works will be funded and each owner will walk away with $275,000 of added value to their property - all tax-free for those owners who have their apartment in their personal name.
Another good news story from Buy Airspace
Please contact Warren at Buy Airspace with any questions on 0415 254 420.