Paying mgmt fees after retirement? How?

The_Brood

A new reality that has dawned on me is that for those of us interested in buying an apartment, management fees are a lifelong expense that ends neither when you pay off your full mortgage, neither when you retire. The opposite, they can only get higher and higher, and in Dublin are already over 2000 euro a year.

I suppose I am trying to understand the practical reality of how people can possibly continue paying that after retirement and relying solely on a pension? For some just a state pension? Along with other more obvious bills that need to be paid. But ever increasing apartment mngt fees that are already 2k and will continue rising...who is able to afford that for life?

Or is it a reality that nobody in Ireland retires living in apartments? You must have a house in order to avoid these fees?

heebusjeebus

2,000 would be the upper end. My last apartment was €700 in Dublin.
That's no more or less than your Sky tv and broadband package a month.

Markcheese

Why would a retired person not pay management fees? 2 thousand does seem a lot, but does that include a decent sinking fund to cover maintenence expenses?
If youre retired would you have time to get on the management board of the appartment..?
And see where the funds are spent,

markpb

If you own a house (which may or may not come with management fees), you'll still have to pay for insurance, repairs, maintenance, etc. You hopefully won't be paying a mortgage at that stage. As others have said, very few people are paying €2,000 in management fees. In my experience, €900 - €1,300 is about average and hasn't changed significantly in the past few years.

What is a bigger risk is OMCs with insufficient sinking funds (most of them) will have to levy owners when something expensive needs to be repaired or replaced. Retired people may find that hard to pay but probably no harder than younger families who are paying a mortgage and a management fee.

o1s1n

2000 is 38 a week. Not that much when you break it down to that level.

That does seem like a bit more than the average though. My current is 1650 in Dublin and that's with an underground carpark (parking space included in the price) and a large communal garden area.

SozBbz

Management fees can be good or bad value.

I pay roughly 1400 per year and for that it includes maintenance of substantial common areas including landscaping, all bin charges, block insurance and a contribution to a sinking fund for future works. We also have CCTV in the development so I suppose it gives me security too.

If I had a house which was not part of a MUD, then I'd still have a lot of those costs.

DubCount

If you own a house, you pay waste disposal, garden maintenance, property insurance. Management fees in an apartment is just a different way of paying.

Xterminator

just taking you question in context, most professionals do have a private pension and will not be reling to the state pension for their sole income.

if you are comparing the mgmt charges to the costs associated with owning your own house then yes it can be more expensive than having your own bills but then no one actually know what the average mgmt fee is. It certainly wouldn't be over 1500PA which is under €30 a week.

as mentioned by the last poster if your paying for your bins & home insurance , and giving a young lad a few bob to cut the grass for you, your probably not terribly worse off.

I do think if more residents were active on the board of mgmt, better oversight would help reign in fees.

Lux23

Imagine if you never buy a place and you had to pay rent?

klaaaz

SozBbz wrote: »

Management fees can be good or bad value.

I pay roughly 1400 per year and for that it includes maintenance of substantial common areas including landscaping, all bin charges, block insurance and a contribution to a sinking fund for future works. We also have CCTV in the development so I suppose it gives me security too.

If I had a house which was not part of a MUD, then I'd still have a lot of those costs.

DubCount wrote: »

If you own a house, you pay waste disposal, garden maintenance, property insurance. Management fees in an apartment is just a different way of paying.

Bins for a house maybe 250, house insurance per year maybe 500-600 pa. It hardly costs much to mow a lawn yourself if you have one. Still alot cheaper to live in a house without a management fee than in an apartment with a management fee and houses tend to be bigger than apartments with the bonus of having their own private outdoor areas, more value for your euro.

Franz Von Peppercorn II

klaaaz wrote: »

Bins for a house maybe 250, house insurance per year maybe 500-600 pa. It hardly costs much to mow a lawn yourself if you have one. Still alot cheaper to live in a house without a management fee than in an apartment with a management fee and houses tend to be bigger than apartments with the bonus of having their own private outdoor areas, more value for your euro.

What’s missing there is the sinking fund. In theory in apartments its the sinking fund that will pay for repairs. A house owner has his own repairs over 20-30 years.

One of the best things the government could do is allow fees to be a taxable write off.

SozBbz

klaaaz wrote: »

Bins for a house maybe 250, house insurance per year maybe 500-600 pa. It hardly costs much to mow a lawn yourself if you have one. Still alot cheaper to live in a house without a management fee than in an apartment with a management fee and houses tend to be bigger than apartments with the bonus of having their own private outdoor areas, more value for your euro.

You're missing the point though - no one said management fees are the absolute cheapest but you do see value from them. I live in a managed development and don't own a lawn mower, so I'd have to buy one and other tools etc if I was responsible for maintaining everything around me. Also, it would take time and would require me to be physically able. To me, it makes sense that some older people might quite fancy living in a MUD where they don't have to take on these tasks. We have a gardener in every Tuesday morning and the place is always immaculate. There is a value in that. Owners here just set up a quarterly direct debit and then things just work like clockwork around them - super easy and suits plenty of people.

We also have a significant communal fund to cover any larger future expenses (ie roofing works for example). Every owner is essentially putting a few hundred euro into this pot every year. Its not only comforting to have, but its attractive to anyone looking to buy in.

Anyone who owns a house should be budgeting for some maintenance spend every year, as well as the ongoing costs. Management fees are just another way of doing this in an organised way when space is shared.

What I would say is that for certain people, be that the elderly or young professionals, its a very low maintenance way to live. If you want to ensure your fees are being spent well then get yourself elected to the board. The board are just ordinary owners and in my experience always seek to get value for money.

Factors that effect fees hugely are things with high maintenance/replacement costs such as electric gates, underground carparks and lifts.

Mrs OBumble

klaaaz wrote: »

Bins for a house maybe 250, house insurance per year maybe 500-600 pa. It hardly costs much to mow a lawn yourself if you have one. Still alot cheaper to live in a house without a management fee than in an apartment with a management fee and houses tend to be bigger than apartments with the bonus of having their own private outdoor areas, more value for your euro.

How much to paint it every few years, fix the leaky roof and blown up boiler?

airportgirl83

Many new developments have management fees on houses as well.

We almost bought a house in the Royal Canal Park but €900 per year management fee put us off - purely because it's for lifetime.

SozBbz

airportgirl83 wrote: »

Many new developments have management fees on houses as well.

We almost bought a house in the Royal Canal Park but €900 per year management fee put us off - purely because it's for lifetime.

Thats quite expensive for just a house, but again it depends on whats included.

Houses in our MUD are around €600, but thats bins, landscaping of communal areas, public liability insurance and sinking fund contribution so doesnt seem bad value to me.

dennyk

klaaaz wrote: »

Bins for a house maybe 250, house insurance per year maybe 500-600 pa. It hardly costs much to mow a lawn yourself if you have one. Still alot cheaper to live in a house without a management fee than in an apartment with a management fee and houses tend to be bigger than apartments with the bonus of having their own private outdoor areas, more value for your euro.

So you're already up to at least €600 or so right there (taking into account the difference between homeowner's insurance and the contents insurance you'd have to buy yourself in an apartment). And if you aren't physically capable of doing all the necessary yardwork yourself, that's an added expense as well. Now add to that the cost of exterior maintenance and upkeep on the building itself; that can easily be hundreds of euro a year overall, maybe more depending on the age of the property. It's not always spread out, either; if you happen to hit a big job like a new roof, that's five figures coming straight out of your pocket (hope you've been keeping up with your own personal "sinking fund"...). You will often have higher utility bills in a house as well, with more interior space to keep heated and more exterior wall area. A properly managed apartment management company can definitely be cheaper than maintaining your own detached house and property, due to economies of scale and higher density (a dozen apartment units will generally have far less exterior roof and wall area than a dozen detached homes, for instance).

klaaaz

Mrs OBumble wrote: »

How much to paint it every few years, fix the leaky roof and blown up boiler?

dennyk wrote: »

So you're already up to at least €600 or so right there (taking into account the difference between homeowner's insurance and the contents insurance you'd have to buy yourself in an apartment). And if you aren't physically capable of doing all the necessary yardwork yourself, that's an added expense as well. Now add to that the cost of exterior maintenance and upkeep on the building itself; that can easily be hundreds of euro a year overall, maybe more depending on the age of the property. It's not always spread out, either; if you happen to hit a big job like a new roof, that's five figures coming straight out of your pocket (hope you've been keeping up with your own personal "sinking fund"...). You will often have higher utility bills in a house as well, with more interior space to keep heated and more exterior wall area. A properly managed apartment management company can definitely be cheaper than maintaining your own detached house and property, due to economies of scale and higher density (a dozen apartment units will generally have far less exterior roof and wall area than a dozen detached homes, for instance).

That's an over exaggeration, a boiler does not fail in a house every year! Nor does the roof need repair every year!

I've lived in badly insulated apartments before, just as expensive to heat as a house.

On old age, how does a person in an apartment manage to climb all those stairs (and dragging up shopping) where there are no lifts??

Yardwork if it's just a yard just needs to ability to use a sweeping brush! Of course some houses have big grass gardens, don't buy a house like that even some houses have concrete driveways now and decking\large patio out the back. Minimum maintenance with minimum costs unlike apartments.

airportgirl83

I personally don't think management fees are an issue here as there will be costs involved in maintaing a house as well - being able to support yourself from the state pension without an additional private pension or other investments, is a worry imo it's a ticking bomb

Franz Von Peppercorn II

klaaaz wrote: »

That's an over exaggeration, a boiler does not fail in a house every year! Nor does the roof need repair every year!

I've lived in badly insulated apartments before, just as expensive to heat as a house.

On old age, how does a person in an apartment manage to climb all those stairs (and dragging up shopping) where there are no lifts??

Yardwork if it's just a yard just needs to ability to use a sweeping brush! Of course some houses have big grass gardens, don't buy a house like that even some houses have concrete driveways now and decking\large patio out the back. Minimum maintenance with minimum costs unlike apartments.

You’re missing the point. If the high management fees in an appartment include a sinking fund then that should pay the roof, external painting etc.

Each, however, to their own

Heres Johnny

For 8 years I worked as a financial advisor, some would call it it an insurance salesman, but it was much more than that. The sheer amount of people I know that didnt buy a house and probably never will I advised to save for retirement etc are sleepwalking into a retirement in which they will be paying rent on a property and all the associated bills on just the state pension is frightening.

Whether it is management charges or just bills on a standalone house, its manageable but not with rent on top of it....a couples state pension is about 26,000 a year now. They will not be able to afford to live where they want in retirement.

My parents are retirement age and while my father was savvy with saving etc my mother was not but theres enough there between them to survive comfortably (about 50k a year with no mortgage)

I dont work in that field anymore but if anyone is reading this and takes heed and actually acts on it, you have done your future self a big favour.

Edgware

Franz Von Peppercorn II wrote: »

What’s missing there is the sinking fund. In theory in apartments its the sinking fund that will pay for repairs. A house owner has his own repairs over 20-30 years.

One of the best things the government could do is allow fees to be a taxable write off.

Management fees can be written off if you are a landlord but why should they be written off for owner residents?
Houseowners should be able to claim for house and garden maintenance if that was the case.
Apartment owners should just face the facts that if they want proper services they must pay.
If peopple are not financially savvy enough to make provision for retirement then they will just have to manage their income better and make sacrifices

Sleeper12

The_Brood wrote:

I suppose I am trying to understand the practical reality of how people can possibly continue paying that after retirement and relying solely on a pension? For some just a state pension? Along with other more obvious bills that need to be paid. But ever increasing apartment mngt fees that are already 2k and will continue rising...who is able to afford that for life?

You're having a laugh right? We have one of the highest state pensions in the world.
The extra that Irish OAPs get compared to the UK would pay more than your 2K maintenance fee and we are talking about another increase in the budget. Irish OAPs get far more perks too inc fuel allowance, free TV licence, free travel throughout Ireland etc

Bin collection, insurance peopel always seem to forget this aspect of the issue.

hmmm

There's always such confusion about management fees. They're a way of paying for the services you need in an apartment, but paid as one annual bill which largely remains the same into the future - if you live in a house, you'll have most of the same expenses, but you'll be paying it in bits and pieces - and you'll probably have a big expense every 10 years or so.

If you can't afford to pay your fees for an apartment, you're not going to be able to pay to get your gutters cleaned, your house painted, the wall repaired, the roof repaired, the tree cut down, the house insurance etc. In many ways the management fee are easier to plan for - it might go up a bit every year, but it should remain pretty consistent in a well-run block.

How are you going to pay for it in retirement? Out of your pension, like everyone else pays for their house expenses.

pwurple

From what I have seen, there are huge discounts for bulk. It is cheaper to have the bins for a block collected than an individual paying for each unit. Lighting, security, lifts, gardens, all paid for communally are far cheaper than going it alone.

Also, the alternative of not paying the management fees is unpleasant all round. some people do “refuse” to pay them, much as water, or tv license, or other bills, even though it is in the contract when you buy a unit. You end up putting up the management fees for everyone else, as the insurance and lift maintenance, bin collection and everything else still needs to be paid. Meanwhile, they have to pay to pursue you through the courts for the whole lot of back charges, plus legal fees. You basically end up losing that apartment.

Diemos

Edgware wrote: »

If people are not financially savvy enough to make provision for retirement then they will just have to manage their income better and make sacrifices

Personal responsibility.

That's just victim blaming and racist. Sure didn't we all bail out the banks.

As stated earlier, a significant proportion of our population are sleep walking into retirement poverty, most of these are currently paying SKY bills and PCP on a car that they can't afford but in 20 years time their predicament won't be their fault, that I can guarantee.

klaaaz

klaaaz wrote: »

That's an over exaggeration, a boiler does not fail in a house every year! Nor does the roof need repair every year!

I've lived in badly insulated apartments before, just as expensive to heat as a house.

On old age, how does a person in an apartment manage to climb all those stairs (and dragging up shopping) where there are no lifts??

Yardwork if it's just a yard just needs to ability to use a sweeping brush! Of course some houses have big grass gardens, don't buy a house like that even some houses have concrete driveways now and decking\large patio out the back. Minimum maintenance with minimum costs unlike apartments.

Im watching my retired mother and aunts/uncles and their friends.

Like you say mowing the grass doesnt cost that much if... (and its sometimes a very big IF) they can mow it themselves or the garden isnt too big for them to manage.

Many are also living in older houses that they have lived in for years. I find that there is pretty much always something needing doing down home.

pwurple

Diemos, You forgot “tax the rich”.

Listen, it’s not easy to end up living on a pension. Certainly things happen beyond people’s control, illness, loss of employment due to being unable to work, domestic abuse of all kinds leaving people without finances. Humans have human problems.

I know people who got caught up in company shares schemes years ago, where they were strongly incentivized to put their pension directly into the company shares for a bonus payment. The whole lot was wiped out when the company went bust, leaving them with no pension.


Even within my siblings, I am the only one with a private pension, a few investments and any kind of retirement plan. We are all 30’s /40’s. And even with that, I am aware of all the things that can still go wrong with my plans. The Pension Levy coming back, or all the markets crashing just when I am getting ready to start drawing down (as happened a heck of a lot of people in the recent past). Unexpected health issues in any member of my family. And that’s the small stuff that is almost inevitable, or the “known unknowns”. Then there are the “unknown unknowns”. What will brexit do the markets, world instability or wars would make mincemeat of my planning. We can still get wiped out financially by events way out of our own control.


Management fees are known in advance and can be planned for. For me, that’s the best kind of expense.

The Enbalmer

Another reason to never buy apartments. You'll be paying management fees to your dying day as well as the fact that you never own an apartment fully..they are all leasehold interests and not freehold...very bad title indeed.

Wildly Boaring

Houses need money spent on them especially if bought in early life.

For example my parents are retired. They bought a new house at 30. Dad reckons he has put 40k into house over last 10 years.

New windows and doors.
New soffit and fascia.
New alarm system.
Pumped cavity and improved insulation in attic.
New solar panels.
Other more standard like paint inside and out. New flooring in kitchen......

Now not all of that is upkeep but in a 35 year old house the windows and fascia were rotting.
There was no alarm. Insulation was awful.

They will have other upkeep expenses going forward. Driveway is potholing and we will replace next year. Roadside fence is in bits.

This is without big ticket items like say the septic tank or water pump or Stanley stove giving up.

The Enbalmer

Wildly Boaring wrote:

Houses need money spent on them especially if bought in early life.

And when the money is spent it stays spent.A driveway,alarm,windows,roof etc are once or maybe twice in a lifetime expenses.
No house costs 2000 euro per year,every year in maintenance costs.

ted1

klaaaz wrote: »

Bins for a house maybe 250, house insurance per year maybe 500-600 pa. It hardly costs much to mow a lawn yourself if you have one. Still alot cheaper to live in a house without a management fee than in an apartment with a management fee and houses tend to be bigger than apartments with the bonus of having their own private outdoor areas, more value for your euro.

Roof repairs , exterior painting, window replacements, structural issues are all extras a home owner has that a MC fee looks after in the long term they balance out.

ted1

The Enbalmer wrote: »

And when the money is spent it stays spent.A driveway,alarm,windows,roof etc are once or maybe twice in a lifetime expenses.
No house costs 2000 euro per year,every year in maintenance costs.

A roof replacement can cost 40k , someone who bought a second hand house in their 30s may need to replace the roof when they are retired . Windows can cost the same and need replacing replacement when

Wildly Boaring

The Enbalmer wrote: »

Wildly Boaring wrote:

Houses need money spent on them especially if bought in early life.

And when the money is spent it stays spent.A driveway,alarm,windows,roof etc are once or maybe twice in a lifetime expenses.
No house costs 2000 euro per year,every year in maintenance costs.

No but that 2000 includes bins. So now its 1700. It includes all insurance bar contents so now it's 1500 or less.
That's 30k in 20 years and as above the parents have spent 40k in 10 with more to come.

It's a lot of money. I wouldn't like it but I can understand it

ted1

ted1 wrote: »

A roof replacement can cost 40k , someone who bought a second hand house in their 30s may need to replace the roof when they are retired . Windows can cost the same and need replacing replacement when

How many roofs have you seen being replaced?

The Enbalmer

ted1 wrote:

A roof replacement can cost 40k , someone who bought a second hand house in their 30s may need to replace the roof when they are retired . Windows can cost the same and need replacing replacement when

My parents bought in 1973 and the roof doesn't need replacing nor do the windows.

My house was built in 1956 and had new windows in 1990 and they're not going anywhere anymore than the original tiles roof is..just look at the houses in Georgian squares..they don't need new roofs or windows and they're standing for 200 years.
The trick is not to buy either a complete wreck or worse,a modern new build.

The Enbalmer

Wildly Boaring wrote:

No but that 2000 includes bins. So now its 1700. It includes all insurance bar contents so now it's 1500 or less. That's 30k in 20 years and as above the parents have spent 40k in 10 with more to come.

You think management fees aren't going to increase over 20 years?

I'm 19 years in my gaff and the most I spent was 20k on an extension,which you can't do in an apartment.

Wildly Boaring

My house built in 96 and I'd put windows in it in the morning if we weren't selling.

I'd also think of redoing driveway in next 5 years.

That's about it.

No change out of 10k for that in a few years though. And agreed the roof is going nowhere. Can't say the same confidently for the boiler though.

L1011

The Enbalmer wrote: »

just look at the houses in Georgian squares..they don't need new roofs or windows and they're standing for 200 years.

Most of them need both but can't have them due to being protected structures.

ted1

The Enbalmer wrote: »

My parents bought in 1973 and the roof doesn't need replacing nor do the windows.

My house was built in 1956 and had new windows in 1990 and they're not going anywhere anymore than the original tiles roof is..just look at the houses in Georgian squares..they don't need new roofs or windows and they're standing for 200 years.
The trick is not to buy either a complete wreck or worse,a modern new build.

When were the windows last replaced ? My folks replaced their roof this year , house was built probably in the 60s

I remember a flat roof that was about 16 years old cost about 10k.

The Enbalmer

ted1 wrote:

I remember a flat roof that was about 16 years old cost about 10k.

I don't have a flat roof and I don't know anyone who foes.

ted1

The Enbalmer wrote: »

I don't have a flat roof and I don't know anyone who foes.

Grand so you are obviously an exception

pwurple

The Enbalmer wrote: »

No house costs 2000 euro per year,every year in maintenance costs.

:rolleyes::rolleyes::rolleyes:

No, Most houses cost 2k per year in maintenance. At least!

You spent 20k improvement in 19 years, so that’s over 1k per year so far. Did you never paint or clean the outside of it? Gutters, fascia, soffit? No garden cost at all? And no bins or insurance?

The Enbalmer

pwurple wrote:

No, Most houses cost 2k per year in maintenance. At least!

pwurple wrote:

You spent 20k improvement in 19 years, so that’s over 1k per year so far. Did you never paint or clean the outside of it? Gutters, fascia, soffit? No garden cost at all? And no bins or insurance?

Not maintenance..home improvements. Adding value to the house. What home improvements can you make to an apartment? Most blocks won't even let you install a satellite dish and you certainly cannot extend the building and you have no garden or driveway.
Added to that you have a 20% occupancy of social welfare claimants and you're also paying for their management costs. At least with a freehold property any maintenance adds value and if an apartment block suddenly needs 2 million worth of fire remedial work well then the residents have to pay it..as is happening all over the country.

Buying an apartment in Ireland is a mugs game.

Addle

Maintenance doesn’t add value.
It maintains value hopefully.
Improvements don’t always add value either.
Definitely cheaper to run and maintain an apartment than a house.

The Enbalmer

Addle wrote:

Maintenance doesn’t add value. It maintains value hopefully. Improvements don’t always add value either. Definitely cheaper to run and maintain an apartment than a house.

What improvements can you make to an apartment? And why would anyone buy a leasehold interest?

The Enbalmer

L1011 wrote:

Most of them need both but can't have them due to being protected structures.

So you reckon they're all leaking away inside due to rain ingress?

Not a bit of it..I've had offices in several Georgian buildings and I've always been amazed at the quality of their construction and weather tightness.

Modern buildings on the other hand.. cheaply built using cheap materials,cheap labour and skimping on all sorts of vital components.

Apartments are even worse,many of them don't have adequate soundproofing and the priory hall scandal is just the tip of the iceberg viz a viz fire safety.

Addle

The Enbalmer wrote: »

What improvements can you make to an apartment? And why would anyone buy a leasehold interest?

A 999 year leasehold interest is as good as a freehold interest. Apartments can make for great city living options. Not everyone wants to maintain a garden.

Plenty of owners make improvements to apartments.
I know a couple who reconfigured their interior from a 1 bed with separate kitchen/living to a 2 bed with an open plan kitchen and living with great success. A couple of their neighbours did the same thing after.
I’ve seen below attic flat owners extend into attic on tv shows.

Not everyone wants to or can ‘add value’ to their houses. They gain equity my paying their mortgages and then maybe downsizing, to possibly an apartment!

That’s our current plan anyways. Retire to a seaside apartment hopefully.

The Enbalmer

Addle wrote: »

Plenty of owners make improvements to apartments.
I know a couple who reconfigured their interior from a 1 bed with separate kitchen/living to a 2 bed with an open plan kitchen and living with great success. A couple of their neighbours did the same thing after.
I’ve seen below attic flat owners extend into attic on tv shows.

That would cause huge issue with the deeds..and is most likely against the terms of the lease.


Extending into an attic? I'm sorry but i just couldn't see that ever occurring in an irish apartment block!

Forget about the big-ticket items, bins, insurance alone is going to be the guts of 500 to 600 euro a year how are people going to pay for that when they retire let alone any random maintenance costs.

SozBbz

The Enbalmer wrote: »

That would cause huge issue with the deeds..and is most likely against the terms of the lease.


Extending into an attic? I'm sorry but i just couldn't see that ever occurring in an irish apartment block!

A friend of mine has it done in a duplex she owns in Dublin. It was done by the previous owner. Its not a legit 3rd bedroom, but its a great extra space as a home office/somewhere to store things/do the ironing or what ever.

Contrastingly in the duplex I own, the attic spaces are considered part of the common areas and none are therefore converted out of abuot 30 duplexes. Personally I don't think it would be bad it there were solid parameters on how the conversions would happen, but then also I'm sure those not doing it would be impacted by noise etc. Also its giving up something thats supposed to be a joint asset to an owner. In practice it makes no odds, but on paper its kinda giving something up for free.

We are moving soon, and I've no intention of doing it, but I might ask just to see whats possible.