What Should Your Strata Fees Be?

Did you know the highest viewed article on our website is about strata fees?

We’ve recently been making improvements to the website and are currently curating our blog so it’s easier to find the content that can help you. I’m hoping to launch that new library of resources very soon.

What we’ve found in this process is that an article I originally wrote 7 years ago, titled “High Strata Fees: Should You Be Worried?” has constantly been our number one viewed blog article year on year.

So I decided to update it with current day figures and some more detailed information.

It’s a hot topic and for good reason.

Image illustrating Strata Fees in property management

Strata fees cover the costs of maintaining and managing the common areas of your property, such as:

  • Administration
  • Management
  • Gardens
  • Pools
  • Elevators
  • Building maintenance
  • Shared spaces
  • And more

They are essential to ensure that the property remains in good condition and retains its value (or in some cases, increases it’s value).

  • Cleaning and Gardening: Regular upkeep of common areas to maintain cleanliness and aesthetics.
  • Repairs and Maintenance: Routine and emergency repairs to common property elements.
  • Insurance: Covers the building, common property, and sometimes, public liability.
  • Utilities: Water, electricity, and gas for common areas.
  • Management Fees: Costs associated with the strata manager who oversees the property’s maintenance and administration.

Strata fees are set based on the annual budget agreed upon by the owners’ corporation. This budget reflects the anticipated costs (including professional assessments) for maintaining and managing the property over the year. Fees can vary significantly depending on the size and amenities of the property.

Determining whether your strata fees are too high can be tricky. Higher fees often indicate more comprehensive maintenance and better facilities (or smarter saving for future expenses), which can enhance property value. However, it’s essential to ensure that the fees align with the services provided and that there is transparency in how funds are used.

Sometimes, you are just better off paying a slightly higher strata fee now so your building can “save for a rainy day”, or so that the building is better maintained.

As a general guideline, strata fees typically range from 0.3% to 0.7% (and up to 1.2%) of the property value per year.

However there are many factors that can influence the strata fee as well:

  • Property size and age: Larger and older properties might require more maintenance.
  • Facilities: Pools, gyms, and elevators increase maintenance costs.
  • Management quality: Efficient management can optimise costs.

It’s important to compare your fees with similar properties in the area to gauge if they are reasonable.

Here’s a more detailed breakdown:

Lower end (0.3%): This might apply to newer buildings with fewer amenities or buildings where the management has optimized costs effectively.

Mid range (0.5%): This is a common range for many well-managed buildings with a standard range of amenities. This is usually around the range that we purchase for clients (and that I own for myself).

Higher end (0.7% or more): Applies to buildings with high-end amenities, older buildings requiring significant maintenance, or very premium locations.

Lower end: $750 per quarter

Mid range: $1,250 per quarter

Higher end: $1,750+ per quarter

Note: These are rough estimates, and actual strata fees should be verified for specific properties and buildings.

If you are ever buying an investment property, it’s crucial to obtain a strata report BEFORE you make an offer (along with all your other essential reports and an independent valuation). The strata report provides detailed information about the financial health of the strata scheme, any upcoming maintenance or repairs, and past issues that have been addressed.

A thorough strata report can reveal potential red flags and help you avoid costly surprises down the road.

If you’d like to see the full article with all the updated information and far more detail about strata fees, you can click here.

If you are looking to buy an investment property and are unsure about the strata fees, or you own an investment property and would like some expert insight, book a time to chat and we will be happy to walk through the figures with you.

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