Introduction and Advantages of buying a Unit

The desire to own your own home is so deeply ingrained in the Australian psyche that it is often referred to as the Australian Dream. Having that home on its own block is perhaps the normal way in which this dream gets visualised.

There is, however, another way of owning your own little piece of Australia that may perhaps be better suited to your budget and your specific needs. We are, of course, referring to the possibility of buying a unit.

A unit can simply be defined as a property (flat, townhouse etc.) that is part of a larger development. The most common way of buying this type of property is under 'strata title? arrangements. The most important characteristics of strata titles are:

• Individuals can own, and enjoy security of tenure in, individual properties within a development.
• Owners of individual units form a body (an owners corporation also sometimes known as a body corporate) to administer, control and maintain common property (e.g. land, leisure facilities, common areas etc.).
• The owners corporation has the power to impose compulsory levies on owners to enable it to properly fulfil its functions.

The strata title system has the advantage of bringing the energies, talents and resources of many different people together in running a development for the benefit of all the owners. Badly run owners corporations can, on the other hand, make investing in a particular unit a less attractive proposition.

You should therefore make very sure that you do a bit of basic homework before taking the plunge. We will focus on things to look out for below. Before we do that, however, it might be good to just take a brief look at the benefits of buying units as well as at the investment outlook for residential units.

Advantages of Buying a Unit

There are some distinct advantages to buying units, over and against the more traditional detached house. The most important among these are:

Price

Units are, on the whole, less expensive than detached homes. This means that they can offer a slightly easier entry onto the property ladder.

Location

One of the results of the Australian Dream was the massive urban sprawl of the major metropolitan centres as the space required for all those quarter acre blocks meant that new houses were being built further and further away from city centres. It is, in contrast, often the case that new units are being released in better locations, much closer to the action. Buying a unit can therefore be a relatively inexpensive way to avoid a daily commute of epic proportions!

Sense of community

Some people dread the idea of living too close to their neighbours. For others this is exactly what attracts them to units? Some unit based developments attain a strong sense of community that very often translates into positive interactions between residents and a greater level of personal security. This can of course be very positive for older residents as well as for members of single parent families.

Lower running costs

Units are generally easier to maintain and the general maintenance of common property are undertaken by the owner's corporation (with the costs being split between residents in the form of a levy). These two factors combine to make running a unit, in general, less expensive than a detached house.