Julian Fadini: Are Body Corporate Fees Really a Deal Breaker for Property Investors?

Should you buy a property with body corporate fees? 

Julian Fadini explains why body corporate properties are not always a deal breaker – but investors need to know what they are getting into.

With more investors entering the market and apartment and townhouse living becoming increasingly common across Australia’s major cities and growth corridors, one key question keeps coming up: should you invest in a property that includes body corporate fees?

According to property investment expert Julian Fadini, founder and CEO of PRPTY360, the answer is not black and white. For some investors, properties with body corporate structures can offer excellent returns, for others, they may present hidden costs and management headaches.

“We help many people to build their wealth through property. 99 percent of the property we suggest involves house and land.  This is because the value of land always goes up and it is a finite resource,” Fadini said. 

“Not everyone can afford to invest in a house and land, so for many a townhouse can be a good entry point.  Many have body corporate so the question we always get asked is should we buy a property that has a body corporate and the answer is always – it depends on a number of factors.”

“Body corporate fees are not automatically a red flag. But too many investors buy into strata properties without fully understanding the financial and operational implications.”

The upside: lower maintenance and strong tenant appeal

Fadini explained that body corporate properties including townhouses, apartments and unit complexes often appeal to renters due to their convenience, shared amenities and lower day-to-day upkeep.

“For investors who want a hands-off experience, body corporate-managed properties can be ideal. You’re not responsible for mowing lawns, fixing fences or maintaining shared facilities, the fees cover that,” he said.

In townhouse complexes especially, body corporate fees often maintain gardens, external lighting, security gates, visitor parking and driveways – features that increase the appeal of the property to tenants while minimising landlord responsibilities.

“These added features can help attract long-term tenants and create a stronger rental return,” Fadini said.

The downside: rising fees, surprise costs and limited control

However, Fadini warned that investors must look beyond the initial figures.

“Fees can rise significantly over time, particularly in older or poorly managed buildings. You also need to be aware of special levies that can be charged without much warning,” Fadini said. 

Special levies may be applied for major upgrades like roof repairs, repainting, compliance upgrades or structural issues. Fadini cautioned that investors caught off guard could face thousands in unexpected costs.

Another drawback is control. Renovation decisions, maintenance schedules and even rental restrictions may be subject to committee votes or rigid by-laws.

“Body corporate rules can limit what you can do with your investment. That’s a risk some investors don’t fully realise until after settlement,” he said. 

Do your research before you buy

Fadini stressed that due diligence is essential when considering any property with a body corporate.

“Before buying, review the body corporate reports, including financial statements, the sinking fund balance, upcoming maintenance items and meeting minutes,” he said.

“These documents will tell you a lot about the financial health of the building, the competence of the management and whether there are red flags like disputes, hidden costs or underfunded repairs.”

So, should investors avoid strata altogether? Not necessarily

Fadini explained that strata properties including modern townhouse developments can still be smart investments if the fundamentals stack up.

“Look at the rental demand, growth potential and how well the property is managed. If everything aligns with your strategy and the numbers work, there’s no reason not to proceed,” he said.

“Body corporate fees are tax deductible if you are an investor but the numbers need to stack up.”

Final advice for investors

“Body corporate properties can be a great strategy for investors priced out of standalone homes or looking for low-maintenance growth assets but the key is understanding what you’re buying into,” Fadini said.

“Fees are not the problem, lack of due diligence is.”