Low Cost High Yield Sees Investors Attracted Back to Strata Properties 17/07/2009 A strong rental market is seeing investor interest in strata titled units once again gaining prominence in the Sydney property scene. Well managed units look particularly good when balanced against record super losses, which are upsetting the retirement plans of many older Australians.
Mr Richard Tooker, director of New South Wales Strata Management sees the effects of this change on a daily basis. “Many investors want an investment that provides a secure turn, and the use of a strata title unit under good management is an option many people are finding attractive at this time.”
He says the calls for management help have seen his company expand more than threefold over the past few years causing need for more staff and an expanded headquarters to house the support teams that help manage many of the strata schemes currently operating in NSW. There are, he says, some 67,000 schemes and around 700,000 individual lots.
“The financial crises saw super funds drop back about 20 per cent earlier this year, giving rise to thoughts of how savings might be better used by many people nearing retirement.”
Strata schemes that are well run can provide support for an investment plan, he says, even when the owners live outside city areas where the many concentrations of investment units are found.
“Repairs and maintenance issues are of significant importance for these hands-off investors. The existence of highly transparent records that give absentee owners accurate and timely reports on the regularity of maintenance and upkeep of common areas and the funds set aside for future needs are the key.”
Mr Tooker says strata levies need to be viewed with care particularly if a unit complex has lifts, security systems or gates, a swimming pool or tennis court, or extensive grounds that require regular upkeep and maintenance.
“Strata units are highly attractive to investors because people can buy into this market at a relatively low cost level, but still receive a very good rental yield. These investors want a strata manager employed that will oversee the scheme, ensuring that the many details of administration undertaken by the Owners Corporation and which are part of the compliance requirements of the Strata Act are adequately attended to.”
He said it is not uncommon for a moderately priced strata unit situated within ten kilometres of central Sydney to return a rental yield of around eight to nine per cent.
Only recently a lengthy review of the licensing requirements for strata managing agents was undertaken and a determination made that the continued licensing was an important factor in keeping NSW a leader in the regulation of strata and community schemes in Australia.
An Owners Corporation seeking assistance in maintaining full compliance with the Strata Title Act can discuss the range of assistance available by contacting New South Wales Strata Management direct on 9890 1841.
New South Wales Strata Management (formerly Gilmour Strata Management) commenced business in early 1991, as a member of the highly respected J A Gilmour & Sons group of companies. Licensed solely and specialising only in strata management services, the company has steadily grown to become one of the largest such organisations in New South Wales.
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