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Cost-effective Levy

Your levy: how cost-effective is it?

It’s difficult to compare one entity’s levy with another if their services and amenities are not the same, but let’s assume that:

The average monthly levy in a sectional title body corporate of approximately 100 units is R1,300.  

This levy includes:

  • 24-hour security at the gate
  • A garden service or staff who take care of all the gardens
  • An estate manager

Now, let’s compare this with maintaining a free-standing home of approximately 180m2 on a stand of 500m2. You hire a gardener twice a week at R200 a day and give them a bonus of R1,600 at the end of the year, which works out to:

R400 a week x 52 + bonus R1600 /12 months = R1,866 a month.  

Your levy of R1,300 is already lower than what you would have paid your gardener. And that’s before you’ve looked at security, which is about R480 a month for armed response on a freestanding house.

Then there are the other services that are covered by your levy, including building insurance (about R500 a month on a house) and the external maintenance of your home.  

In a Sectional Title Body Corporate, specifically, maintenance like painting and waterproofing is included in your levy. If you own a home, you’re looking at about R30,000 every six years or so, which works out to R417 a month.

So, depending on your lifestyle and your finances, a sectional title complex, building or housing estate can offer far more cost-effective value than a free-standing house.

The key is that the building must be well managed, or you’ll simply be paying levies into a ‘black hole’. This is where a good managing agent earns their keep – by making sure that the building’s finances are in check, that the security, maintenance, cleanliness and general running of the complex are in order and that every levy payer in getting their money’s worth.

 

 

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