Part of finding your new home involves deciding if you want to live in a sectional titled property or a freestanding home. Like everything in life, there are pros and cons which you will need to take into consideration to determine what type of home you would like to invest in.
Some of the benefits of a sectional title are that you own your unit, but you are also buying into a community where the common property is shared and is managed by a Body Corporate and Trustees. Although they will run the complex their ability to manage the politics and finance will affect your investment.
Before approving your loan, some of the banks will even assess the financial situation of the complex to ensure you are making a worthwhile investment, however, it is a good idea to go through the books and minutes last annual general meeting (AGM) to assess the scheme’s history and asses that the property is a sound investment for you.
Every unit will pay monthly levies which will cover things like maintenance, insurance, running costs, municipal rates and taxes. Sometimes planned or unplanned special levies will be raised for irregular maintenance and or repairs. So before putting in an offer, it is advisable to find out what maintenance has been completed, what is in the pipeline and what you would need to pay for.
Depending on the insurance that has been selected, the property will be covered from events such as explosions, lightning, floods and fires, in some cases it will cover geysers and permanent fittings, but seldom does it cover your household contents. Find out what is covered and take out additional cover if required.
Although living in a close-knit community provides shared costs and security, you must ensure that you understand the body’s corporate rules which have been designed for everyone to live in harmony. You need to assess if you are willing to abide by the rules and regulations before making an offer. As rules are great when they are telling your noisy neighbour to keep it down, but not so great when they prevent you from doing what you want to do in your home.
Although the Body Corporate and Trustees will be responsible to hire and manage staff, security and maintenance contractors, the freedom to alter, renovate or expand your unit without the approval of the body corporate can be frustrating.
Sectional titles are not for everyone but they are excellent for first-time homeowners as they are affordable to purchase and easier to maintain and they are also a good choice for property investors who want to build a portfolio. As each unit contributes to the running costs they are easier to finance and are a safer investment. However, it is always advisable to get your pre-qualification before deciding on what type of property suits your needs.
To arrange your pre-qualification please contact Martin on 082 447 3463