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Property investors need to know about sinking funds When purchasing an apartment within a strata scheme, a sinking fund is among the foremost considerations for property investors. It may not be the initial thought for a prospective apartment buyer, but it ranks high in the list of crucial factors to contemplate. From expenses like building envelope, roof maintenance to lift repairs, the costs associated with building upkeep can accumulate significantly over time. The concept of a sinking fund, now referred to as a capital works fund in NSW, serves as an emergency fund designated to cover future repair and maintenance expenses for a building. Administered by the owners' corporation, this fund ensures comprehensive maintenance, especially in common areas and not to be confused with the administrative fund. The purpose behind sinking funds is to equip the owners' corporation with ample emergency funds to address any upcoming essential works. Each property owner contributes to the sinking fund through regular payments, aiming to prevent the need for additional contributions when faced with substantial building expenses. Essentially, it serves as a financial safety net for all property owners within the strata scheme. Sinking funds aren't just a characteristic of well-managed buildings; in fact, they are a legal requirement in certain parts of Australia, including New South Wales, Victoria, Queensland, the Australian Capital Territory, and the Northern Territory. In these regions, owners' corporations are legally obliged to have a 10-year sinking fund plan or forecast in place. For more details contact: info@quantumqs.com.au 1300 300 325 Read More: https://www.quantumqs.com.au/blog/property-investors-need-to-know-about-sinking-funds

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