(edit title) Why avgift are so high in new apartment I thought old apartment need more maintenance Options

[åkerman]

I have seen monthly fees for new apartment is high compared to old apartment

• Is it sign of BRF with high loan?
• When do these avgift come down ? after some years or after some age of apartment?
• I have seen even newly done renovation has not increased the avgift more than newly constructed apartment. Then, is it not good idea to buy renovated apartment rather than newly constructed one?

[Essingen]

•Is it sign of BRF with high loan?

Yes, almost certainly this is the case?

•When do these avgift come down ?

In all likelyhood, they will not come down because the amout of capital repaid is very low. They might even go up. The financing of new brf's is a potential minefield where the basic principle is that builders screw as much money out of buyers as is possible. Where there are shops included in the development they may have subsidised rents in the first few years to make the equation even more complicated.

Then, is it not good idea to buy renovated apartment rather than newly constructed one?

Quite likely this is the case. In the case of an existing association look at the borrowings they have (on which they do not get interest tax relief) work out your "portion" of the borrowings, add it to the purchase price and ask yourself if you feel happy servicing that level of debt.

[gakku]

As the previous respondent said, new BRF builders often take loans to cover their expenses which they then pass on to prospective owners, increasing the avgift, but at the same time reducing the buying price slightly. For a BRF house I was looking at last year, they had the loan in such a way that you paid less in the first 2 years, but the amount going to this loan increased over time. I would suggest looking at the financial documents in detail!

[åkerman]

Thanks a bunch guys. Very informative feedback and comments.

[Yorkshireman]

• Is it sign of BRF with high loan?

Not always ... In my BRF We manage the loans very well, but keep the monthly fee at a reasonable (little high) level, and reduce slightly each year depending upon capital reserves.

We have a policy in place NOT to increase the loans at-all. So any planned renovations we do only when enough capital is available, rather than blindly increase loans.

As the previous posters have said, You need to look closely at the handling of the BRF/finances, but not just latest available, a little backwards also. Remember, the BRF board is made up of residents, who knows what business competence they have, or not!

[åkerman]

Thanks.

There are 2 things we need to evaluate when you are buying an apartment..

• whats the monthly expense?
• Is it worth it or is it a good investment?

I do understand that avgift can be high for a reasonably well managed BRF. But, if, avgift is high in comparison to above two questions, it should lead to lower property price evaluation. Because, once avgift is high, it takes a lot of time for BRf to bring it down (years of loan capital reduction and control of new expenses or renovation).

[Yorkshireman]

You also need to check if the BRF is "akta" or "Oakta" ... can simple read as real or not-real BRF.

Sometimes the monthly fee is low because the income from renting out commercial (offices or shops) is greater than from the members. There is a formula that is used to calculate it.

The main difference there is when You sell the apartment in an Oakta BRF:
- You are taxed on 100% of the profit at 30%
- You lose the right to defer the tax on profit. (Uppskov)

So here, the "is it a good investment", depends upon size of profit, duration of living there, and difference akta vs oakta monthly fee over time.

But most importantly, which is hard to find out until later unless You can see in a couple of annual reports, is the BRF driven by complete numpties

[Essingen]

Personally, I would not buy a new Brf in Stockholm at the moment, even though I bought a virtually new one 12 years ago. My impression is that new building standards have fallen. One building put up near us about 8 years ago by a well known national company has been the subject of major repairs on more than one occasion. Whilst this may well be under guarantee, it doesn't exactly inspire confidence.

It now also seems common not to have a separate storage room but to have such a facility built into the apartment. There has been a tendency in recent years to allocate less space to areas such as staircases, obviously in order to fit in more "saleable" accommodation. Finally, builders ensure that the associations have what are, in my opinion, large amounts of inbuilt debt which requires servicing. With interest rates relatively low at the moment, this results in monthly charges that look reasonable now, but might not do so when more normal economic conditions return.

[Kibiri]

With interest rates relatively low at the moment, this results in monthly charges that look reasonable now, but might not do so when more normal economic conditions return.

Understanding the yearly reports (årsredovisning) of a BRF can be quite difficult, but one part that I find easy to read is binding time of the loans that they have. E.g. do they have lots of less than a year loan at low interest rates, or is it reasonably distributed over 3 - 5 - 10 years etc.

[åkerman]

Thanks all for valuable comments..

Personally, I would not buy a new Brf in Stockholm at the moment, even though I bought a virtually new one 12 years ago. My impression is that new building standards have fallen.

• Can you please tell me an apartment from hemnet.se which is same or similar to yours? I would like to take it as benchmark in my future comparisons.
• When you say about storage space, you meant storage cellars in basement are no more a standard in current constructions?

Understanding the yearly reports (årsredovisning) of a BRF can be quite difficult, but one part that I find easy to read is binding time of the loans that they have. E.g. do t ... (show full quote)

Understanding the yearly reports (årsredovisning) of a BRF can be quite difficult, but one part that I find easy to read is binding time of the loans that they have. E.g. do they have lots of less than a year loan at low interest rates, or is it reasonably distributed over 3 - 5 - 10 years etc. ... (hide full quote)

BRF financial documents are published online anywhere? or we need to request the particular BRF for them?

[Essingen]

Well some of the stuff Skanska did around 15 years or so ago was pretty good. Such as this development where blocks are well spaced and not too high...

http://www.svenskfast.se/hemnet/pages/Obje...13BGG4CU6SS0R4J

However, it all depends on what they get planning permission for.

When you say about storage space, you meant storage cellars in basement are no more a standard in current constructions?

Yes, exactly. I have seen two recent developments where this is the case.

BRF financial documents are published online anywhere? or we need to request the particular BRF for them?

The property agent should have them available for you. Otherwise you will need to ask for a copy.

[åkerman]

Thanks. That is really beautifully built.