Investing in commercial real estate can be a lucrative venture, but when the term "Owners Corporation" comes into play, it often raises concerns and uncertainties among investors. However, it's important to recognise that an Owners Corporation should not automatically discourage investors from considering certain properties. In fact, there are numerous advantages associated with properties governed by an Owners Corporation. In this blog post, we will delve into these benefits and shed light on why such properties can still offer promising investment opportunities.
Simplified Insurance
One notable advantage of investing in a property governed by an Owners Corporation is simplified insurance.
As an owner of a specific unit within the property, you typically only need to insure public liability for your individual space. The Owners Corporation's insurance policy generally covers common areas such as hallways, elevators, and shared amenities. This streamlined insurance process can save individual owners both time and effort, as they are not burdened with insuring the entire property.
Enhanced Property Maintenance
Properties governed by an Owners Corporation benefit from enhanced property maintenance. With the Owners Corporation in place, there is a dedicated party responsible for overseeing and maintaining the common areas of the property. This ensures that the overall quality and upkeep of the building and shared spaces are maintained to a high standard.
For commercial property investors, this provides peace of mind, knowing that their investment will be well-maintained and retain its value over time.
Collective Decision-Making
Owners Corporation facilitates collective decision-making, allowing all property owners to come together and work towards common goals for the area. The Annual General Meeting (AGM) serves as a platform to discuss various matters related to the property. During these meetings, owners can address issues such as painting, landscaping, or even larger-scale projects. This collaborative approach ensures the viability and continuous improvement of the property, benefiting all stakeholders involved.
Transparent Financial Management
An Owners Corporation operates on an annual budget, which brings financial transparency to the property. The budget details the fees paid by landlords and reimbursed by tenants, providing a clear breakdown of how funds are allocated and distributed for the smooth functioning of the Owners Corporation. This financial accountability ensures that the Owners Corporation stays within or under budget, demonstrating sound financial management practices.
While properties governed by an Owners Corporation may have some limitations, such as restrictions on future development potential, they still present viable investment opportunities.
Investors who are not solely focused on pursuing development projects should consider these properties as they offer simplified insurance, enhanced property maintenance, collective decision-making, and transparent financial management.
At First National Commercial Neilson Partners, we have extensive experience managing properties within Owners' Corporations. We understand the unique dynamics and benefits of such properties and can assist you in achieving your real estate goals.
Contact our commercial team today to learn more about how we can support your investment endeavors.
