Watch your price pennies and the body corp dollars will take care of themselves
Are the body corp fees really the single most important feature when you’re choosing a home? The location, the size or the age of the apartment maybe? The views or even the condition of the kitchen perhaps? These are the big ‘value’ items and naturally our ads focus on them. So would it surprise you some buyers are selecting which home to inspect based on the amount of the annual body corp fees?
We wrote recently about that mythical place called Buyer’s School and the trend for many home buyers to consistently ask similar questions. Surely they’re all attending some briefing session before hitting the open homes! And the latest must-ask question is focused on body corp fees.
Now we’d be the first to acknowledge that these do vary a lot between buildings, but we’re now being asked for the fees before a buyer will even inspect an apartment. Before they want to know about any other features. And it seems to us the focus has drifted to the wrong concerns.
The first comment is this: no-one makes a profit in a body corp. The fees are set with a budget so if they’re higher it’s costing more to run the building. Lifts, onsite management and insurances are big ticket items. So if you’re happy with stairs or waiting a little longer for your lift, you will save money. One CBD tower has 5 lifts for nearly 500 apartments while a South Brisbane mid-rise has 2 lifts for just 40 lots. Of course one is cheaper. Some bodies corp do put a lot away for rainy days; others run tight. You get what you pay for.
Buyers are naturally drawn to low fees but they need to ask if it’s not just a clue that the building is being run on a shoestring. Is the sinking fund forecast being followed? Will they cop a special levy of thousands, payable immediately, for all sorts of unbudgeted expenses? We’re not defending misuse of your funds and we agree that some bodies corp don’t keep a close enough eye on things. But if you’ve ever volunteered your time for a committee you’ll know it’s a thankless job and many owners don’t even bother to vote at the AGM, let along give their input into budgeting. So cut them some slack – or better still, get involved!
Right now we’re witnessing buyers who are spending half a million dollars or more, weighing their choice heavily based on annual fees. If the fees seem $1000/year too much why not offer $5000 less when you buy it and that’ll cover the next few years. And you’ll have time to join the committee and get the place in shape!
Please give us your comments? Why are body corp fees so important to buyers?