Apartment vs House – What to Watch Out for When Buying an Apartment or Townhouse

hotspotting.com.au and propertyU

There are plenty of good reasons to buy an apartment or townhouse, rather than a detached house, especially now.

For starters, apartments and townhouses are relatively cheaper than detached houses. They’re a chance to get yourself established in an area at a more accessible price point.

Then, while houses usually perform better in the long term, the past year has turned this tradition on its head. Cotality’s recent Home Value Index showed units’ annual growth has outpaced houses in every capital city, bar Melbourne and Sydney. In fact, in Brisbane, unit values have risen faster than houses for the past seven quarters, due to a severe supply shortage.

Apartments and townhouses are also an easy-care and low-maintenance solution for busy people, who would rather spend their minimal spare time relaxing and having fun, rather than maintaining gardens or cleaning.

This all sounds great, but in reality, buying an apartment or townhouse comes with its own unique set of risks. The attached housing dream can quickly turn into a nightmare if you aren’t wary of the issues.

Here’s are just some of the elements you need to watch out for when buying into this property type.

Body corporate fees

These fees are often the largest downside to owning an apartment or townhouse. Annual body corporate fees vary wildly, but don’t be surprised if they come in at $5000… or even higher, depending on the size and age of the apartment complex and its common areas and amenities.

Council rates and utility bills are also not covered under these fees. So, what is?

Body corp fees are generally divided into two sets. Sinking funds cover any unexpected maintenance issues. If the sinking balance is too low when the work needs doing, you’ll likely have to pay increased fees in the future and/or a special levy to cover the cost.

Then there’s administration funds, which cover day-to-day issues such as maintaining gardens or cleaning a communal pool. Administration funds include property manager salaries and insurance for buildings and common areas.

You, or your representative, need to be fully aware of the body corporate accounts and your financial commitments as an owner. You must also carefully read the minutes of all previous body corporate meetings to ensure there are no maintenance items due to be carried out in the near future. You should always check on long-term maintenance issues and the reliability and efficiency of the property manager, especially if they live on site.

By-laws

Living in a body corp complex means more than just paying regular fees. Body corporate bylaws can restrict the plans you may have for your home, such as potential upgrade work and plans for owning a pet.

Any such changes will usually require written permission from the body corporate. Even simple renovations and updates can be difficult, especially if these changes are visible from

the complex’s common aeras. For example, if you want to hang some pot plants on your front balcony or install an air conditioner where the unit might be noticed from outside.

A lot depends on how strict your body corp committee is about such details. Still, I’ve heard of a body corporate committee that forced an apartment owner to uninstall an air conditioning unit visible from the driveway – and all because this owner hadn’t obtained official permission to organise this installation. Another body corporate committee refused an owner’s request to plant flowers outside their townhouse in a common garden area.

So, ensure you’re right across all of the body corporate by-laws. Also, get some understanding of the body corporate's views on renovations before you purchase. Be prepared for difficult restraints when it comes to any changes to your property in the future.

Disputes

Attached housing means attached neighbours. If you’re buying an apartment or townhouse, you’ll have to be prepared for this proximity.

With luck, you’ll have considerately quiet neighbours, who are friendly and helpful. If that’s the case, then attached living can be wonderful for evening yarns over the back fence or a drink on the balcony.

The problem, of course, comes if your attached neighbours love wild parties every night or have a continually barking dog. This is when a smart body corp committee or a reliable on-site property manager can be worth their weight in gold. Similar to sending your complaint to your local council, body corp committees or managers should hopefully be able to tone down the noise for you.

Before you commit to an apartment, check if there’s been any disputes in the building that may affect you. Enquiries with the body corporate manager should help, as will a chat with some of the residents if needs be.

Apartments and townhouses can be a great option for buyers seeking price-accessible housing in desirable locations.

The best options are often in smaller, boutique complexes with functional common area improvements. An excellent on-site property manager is crucial, as is an understanding but savvy body corp committee. Body corp fees should be reasonable, but again, not extravagant.

Pools, spas and lifts can be wonderful, but you’ll have to pay higher body corp fees in return, as these amenities need lots of regular maintenance. Ask yourself too if you’ll really regularly use such amenities.

The smartest move will be to engage the services of a skilled buyer’s agent. They know exactly what to check when it comes to attached housing. We’re experts at unearthing hidden issues, and we’ve got plenty of resources, networks, and experience to ensure you avoid the dangers and secure your dream apartment or townhouse.

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