14 Jun The Best Types of Downsizer Properties
Are you looking to downsize? There is a lot to consider when you’re downsizing from your beloved family home and taking the next step on your property journey. Do you purchase a smaller home or an apartment? Something as simple as that can be quite complicated as not only do you need to love your new home but you also need to like the ownership structure of the property. That is, whether you become part of a Strata Scheme with a unit or a townhouse, or maintain your independence with a Torrens Title property, such as a freestanding house or semi-detached home.
To help you on your downsizing property journey, we share the positives and negatives of the different types of property ownership – Torrens, Strata and Company Title – so that you can decide the right choice for your next purchase.
The Torrens Title was first introduced in NSW in 1863. It is the primary register for land held in NSW and records the ownership and transfer of land. Ownership under this title means that the person recorded on the register is the sole owner of the land and building on it. Also referred to as free-hold one of the greatest advantages of this title is that it is a single document guaranteed by the NSW Government. Types of properties under this title are free-standing homes and semi-detached homes.
Semi-detached homes are essentially two dwellings that share a common wall. Older semi-detached homes tend to be double brick so there is little noise transmission through the common wall. Newer built semi-detached homes are not necessarily double brick so the noise through the common wall needs to be checked. Semis are popular for people due to their lower entry price point than a freestanding home, low maintenance garden while still having outdoor space, the ability to have pets and their Torrens Title.
- Freedom to renovate
- Neighbours not so close
- No strata fees
- More outdoor space/garden
- Potential to add value (additional level, skylights, attic storage)
- Neighbour on adjoining wall (older semis have double brick and are solid so lower noise transmission)
- Responsible for all maintenance
- No Lift
Strata Title is a type of ownership structure for apartment buildings and townhouses. Owning an apartment or a townhouse under this scheme, provides you with an individually owned lot and collectively owned common property.
Apartments are a popular choice particularly for downsizers due to their low maintenance appeal and lock up and go nature, their proximity to amenities, lifestyle and transportation.
- Lock up and go
- Potential views
- More units more choice
- Close to transport networks
- Building maintenance taken care of by strata
- Lifts or can be easy level accesss
- Sense of community
- Building may offer ammenities (gym, pool)
- Multiple neighbours/noise
- Potential special levies
- Permission required by strata to renovate
- Required to follow strata bylaws
- Potential Air B&B renters in building
- Owner occupiers to renters ratio
- May not be suitable for larger dogs
Townhouses are good a good option for downsizers wanting a home but on a smaller scale. This option is good for those wanting a private garden and undercover parking (often with internal access).
- Price point- a lot of amenity for moderate price
- Almost always has parking with internal access
- Larger then an apartment
- Lower density than apartments
- Reduced capital gain potential due to smaller buyer pool
- Often two levels with bedrooms upstairs
- No lift
- Strata fees
- Older townhouses lack uniqueness – often built in 1980’s
The company title structure is where you purchase shares in a building, which gives you exclusive use and ownership of your unit and shared use of the common property. Under this ownership structure, the company owns the land and residents are shareholders. This is the system universally used prior to 1961, and most buildings have now converted to strata title. For properties that have not been converted to strata title it should be noted that there is a significant expense in transferring titles.
- Suitable for owner occupiers as most cannot be rented out, or only for a limited period of time
- For owners same positives and negatives as strata title
- Opportunity to convert to strata title which adds value
- Less expensive to purchase than strata title
- You only own a share in the building not the actual unit.
- The price growth isn’t as much as with strata title, due to limited buyer pool
- Tougher restrictions from lending institutions make finance harder to get and often requires a larger deposit.