First-time Property Buyers: Things You Can Learn from a Pre-purchase Strata Report
Buying a house is an affordable way of entering the property market. However, it is worth your time and money to evaluate your property both physically and in technical real estate terms. Whether you will be living within that property or renting it out to tenants, you need to know some important details about its management plan, the relationship of the people living around and other obligations. For first time buyers, this isn't a walk in the park. Thankfully, a pre-purchase strata report can provide you with meaningful information on the property to help you make an informed decision. Here's what you can learn:
The History of Repairs on the Property
How extensively has the property been refurbished or repaired. This is key to identifying sections that have been in place for a long period and will potentially cost you more in the future. Most importantly, you will get to know of any technical improvements done on the house to enable it stand up to agents of destruction such as floods and earthquakes. For instance, if the property is in an area that is seismically active (prone to earthquakes), technical improvements to the foundation such as using screw piles are ideal for avoiding more losses in the future.
The Value of the Sinking Fund
Building a house and making the property ideal for living is an expensive affair. For this reason, corporations and individuals alike sometimes rely on borrowed funds to complete their housing project. The debt can be issued on condition that the creditor has a right to repossess the house should the investor default or fall short of meeting their debt obligation. To avoid this, investors set up a sinking fund to aid in the repayment of the debt. Basically, a sinking fund refers to money set aside periodically to assist in the gradual repayment of a debt. A pre-purchase strata report helps you ascertain if the property has a sinking fund and if it is adequate to meet the pending debt obligations on that property. Don't get caught in debt obligations by surprise!
Rules on Pets
Does the property management allow you or your tenants to own pets? If so, what category of pets? If you are renting out the property, rules disallowing pets will limit your clientele to people who don't own pets. You need to be aware of this to avoid trouble finding tenants. On the other hand, you will also get to know of any charges levied for rearing pets in that neighbourhood (especially when it comes to game animals).