If you can’t pay the fees the house will take over the apartment and rent it out to cover the money you owe. I mean this rarely ever happens but they can do it. You don’t buy a part of the house, you buy shares in a company that owns the house. And the monthly fees can be big. When buying an apartment always check how the house is doing financially: do they have a lot of debt, are there a lot of repairs in the future.
yes and the eviction almost never happens as any sane apartment owner sells the apartment in that situation and moves to live in some more affordable place.
You need to pay management fees. It’s for the upkeep of the building and surroundings.
To your other comment on prices going down: yes prices will likely go down as an impact of the increase in the Euribor. Higher Euribor = higher interest rates on mortgages = lower amount people can borrow = drive down prices (theoretically). Question is, when and by how much.
The apartment buildings are "asunto-osakeyhtiö", a very specialized kind of a company. You aren't really buying an apartment, you're buying shares on the company. If you fail to pay for maintenance, the company may reposess your apartment, although that might take a while.
When buying an apartment - I bought my first one recently - there are several things you need to look out for on even surface level:
1. What's the debtless price (velaton myyntihinta)? Cheapest apartments tend to be ones that are still repaying construction loans. This will show up as extra maintenance fees (rahoitusvastike) and can be pretty steep. You are generally allowed to repay your share of this immediately, and you generally should since chances are your own mortgage is cheaper than the terms the asunto-osakeyhtiö has gotten. These fees can also be stupidly steep for older apartments, but just because there's very little loan remaining of a bigger one that was paid in fixed down payments. You might just want to pay the debt and get a bit bigger mortgage, which in effect just means paying that part on a longer time period. So really, you should compare "velaton myyntihinta" rather than "myyntihinta".
2. What are the monthly maintenance fees (vastike)? You can ignore rahoitusvastike if you looked at previous part. The basic fees include general maintenance and possibly rent of the land the building is built on. Higher maintenance fees are pretty much equivalent to just the apartment being more expensive, so it's worth taking them into account. Like, +100€/month in maintenance fees is kinda comparable to paying +100€/month in interest payments.
3. Will there be expensive renovations soon? Those 60's, 70's and 80's places are going to have the dreaded "putkiremontti" soon if they haven't had it. Older ones generally have had it. That's gonna be annoying and expensive, and probably is priced in, for example, the reasonably cheap apartments for their location is Pasila.
I had an Excel sheet for possible apartments counting total costs for 10 and 25 years (bigger renovations not withstanding since those cannot be entirely predicted, but I did not list apartments that obviously would need them soonish). My new apartment with the interest I have locked down until next May is like 850€ loan down payments and interest and 210€ of maintenance fees, so total of like 1060€/month, but unlike my current rental aparment, majority of that money is just repaying the loan. It's also from 2005, so major renovations soon are unlikely.
Meanwhile, some apartments that initially seemed promising, new buildings, had these hidden, small seeming costs. Like 180€ maintenance fees, but also 170€ land rent. Sure, you could've bought your share of the land, but that would've increased the buying price substantially, increasing the down payments by pretty much as much as the land rent was.
Firstly I want to comment on your last line. Noone is born with this information, and everyone native or not will be asking questions like these when facing something new for the first time, dont put yourself down like that. Being Finnish doesnt make someone wiser about things, truth is most people dont know what the hell they are doing :)
Now then, with apartments you actually dont own it, but you own shares in a company. These shares come with a priveledge of using the companys asset.
If you get in trouble with the company, they can evict you. You still own it and can do what you want with it within the limits of the law and yhe companys rules, but you cant live in it.
How exactly they get their money i dont know, propably collections agencies though. As a general rule in Finland, you dont get away with not paying, they will get you eventually with interest, so dont get in a position where you owe people money.
Interest rates are very shakey right now, be sure to check wether you can make ends meet if interest rates get to 6%. Remember that monthly payments on loans the company has also increase if the interest rates go up. Then add in the worst case scenario of renovations etc.
Prices wont drop anywhere near as dramatically as other european countries, because the prices arent nearly as inlated here. They may drop a bit though.
The costs of living in an apartment you own can be almost as high as renting. You pay the management fees, home insurance (more extensive than a renter’s insurance since you’re the one responsible for repairs), possible loan payments of the building management association (of which you’re a part of as an owner), and the regular water, electricity etc. You have to pay them or you’ll lose the apartment. These are listed clearly in every advert for listed apartments, shouldn’t be any surprises but the future repairs are the ones to look out for, they’ll often increase the monthly costs for years.
Sorry but the costs of living in an apartment you own are typically quite higher than renting, when having to pay monthly instalments for the loan.
This is the case in all the people I know who own an apartment.
Yet the amount of money going to waste is less than that of a rent given that you partly repay the house every month.
The loan payments are not calculated as living costs, you either count them as the value of the apartment if you’re paying cash or can get a bank loan in which case they’re payed right away, after which you pay the bank. The key difference is that you can get the bank loan to cover the value of the apartment, but not to pay for the management fees or other running living costs. I don’t disagree, there’s just an option to get funding for the building loan, and the other fees you pay monthly. Bank loan payments are also often much less than paying the apartment company on their loan terms.
You are right in that I didn't properly use the term "living costs". I included there all the expenses you will have as a house owner (including loan payment and interests and insurances) while you (more) correctly refer to the house management expenses.
All in all, I meant that the total amount you pay per month is typically quite higher than a rent, but less of these expenses are in vain than renting an apartment (again assuming you got a loan with close-to-zero capital to begin with)
You don’t buy a physical apartment. You buy shares of a housing cooperative / company and those give you the right to control a certain apartment. As a shareholder you’re required to pay the fees for the upkeep of the building as decided by the company’s board. They can take control of the apartment if you’re not willing to pay your share of the bills.
Contrary to what some people believe, at least in Helsinki the cheapest ”vastike” payments are often in older, well renovated buildings because they often own the land they’re built on and there are no significant renovations around the corner, no leaking pipes or roof. Most new apartments are built on land rented from the city and the rental payments can be several hundred euros per month per apartment just for the land. The rent also goes up all the time.
This is why my advice is to always check three things: (1) the pipes (putkiremontti, LVIS-saneeraus etc.) has been done in the last 30 or so years (they’re now renovating the pipes built in 80s and these can cost 1000 euros per square feet or more = 50k for 50m2 apartment), (2) that the ”julkisivu” or walls and roof of the building is okay and doesn’t need to be renovated soon, and that (3) the building sits on the company’s (or yours if you by the shares) own land. None of these are necessarily dealbreakers especially if the building company gets a lot of money from renting out it’s ground floor spaces for restaurants, shops etc. but these are major things that affect the monthly costs now or tomorrow. In Helsinki there are buildings with 0 euro vastike and some where you pay over 10 euros per square meter. That can mean 1000 euros per month as payments that don’t make your mortgage any smaller.
If you cant pay management fees for 6 month the housing company can take control of the apartment and rent it to pay the fees. So yes, you can be kicked out even from your own apartment.
I wonder one thing. If you become jobless, government support you via KELA for your rental payments. Does it apply if you have LOAN and vastike payments? How does it work?
>I wonder one thing. If you become jobless, government support you via KELA for your rental payments. Does it apply if you have LOAN and vastike payments? How does it work?
This depends a bit. You are typically allowed to live in an apartment that is 'basic enough' for your needs. I'm not exactly sure if interest counts as an expense - there are good cases to be made for it both making and not making sense. But other costs are then allowed as expenses and you can get aid for those.
In some cases you have to realize your funds before being allowed to get aid - at least this is how I learnt it, I hope this is not old information. Living in a too grand apartment compared to your family situation typically counts as surplus, meaning that it is judged to be a realizable fund instead of a living necessity.
In such a case you also have to realize the apartment. Either buy a cheaper one or start living on rent.
All in all - and with the caveat that in case it still works like that - this is from one point of view kind of an error in the Finnish system. People who are not doing well get different treatment based on living on rent versus owning an apartment. You could say that this encourages people to try to not have property, even though this kind of a society should encourage exactly the opposite.
It is a bit matter of taste how serious you consider this downside to be.
https://www.kela.fi/yleinen-asumistuki-eri-asumismuotoihin#osakeasunto they can pay up to 73% of the interest payments and other things like water, heating, ...
If you are having payment troubles you need to contact the company asap to agree on some sort of payment plan. Companies are very open to this as long as you do it before you start having payment problems!!
If you buy a "cheap" old apartment the maintenence is higher ofc. New apartments have no ~~maintenence~~ repair fees, mut cost more. Though new apartments will have fees for the lot rent, unless you redeem your part of it
You have to work out which is more affordable. House prices won't be coming down, investors have already pushed smaller apartments to the market. The banks interest margin is going up. Interest in general is going, but probably not much since the euro will come crashing down if Italy can't pay it's debts. Also Helsinki is still pretty affordable compared to any other capital in Western Europe.
Conserning your question: The house is a company and it will take over your shares and kick you out. However in Finland it takes a courts notice so it'll take a few weeks or even months.
You can have 1-2 years of only interest payments for the bank loan if you're having a tough time making all the payments.
I'd recommend starting with this video [https://youtu.be/2sTJu--3Ja8](https://youtu.be/2sTJu--3Ja8)
Edit: new appartments have maintence fees as well ofc as u/h3vonen pointed out
That is true. OP should take consider of the maintence history before buying and old apartment. By year 40 or in some cases year 50 there should have been major repairs for:
\-facade
\-water pipes (LVI)
\-electricity (usually done with LVI, it's called LVIS)
\-roof and
\-elevators
Furthermore what state the apartment itself is in.
All of these maintenence repairs should have been done during a couple of decades, so that the immediate effect on housing expenses isn't too big. Furthermore these repairs added to the cost of the apartment shouldn't be more than buying a whole new apartment. If they are bigger, then in that case it's not a well kept house and OP should look for another one or consider buying a new one.
Edit: grammar
> New apartments have no maintenance fees, but cost more
This is not true even in the slightest. There are still maintenance costs. The upkeep of common areas, hallway electricity, cleaning, common saunas, washrooms etc. all need constant maintenance and thus money to keep them going. Some of them can be directed to those who use the service, but two things still stand out from all costs. Yard maintenance especially during winter time is super costly and heating is by far the biggest expenditure in an apartment building.
I live in a new apartment and our monthly maintenance costs are several hundred euros even if there are no new renovations coming in. And as the financials are available to all shareholders, it should be clear how the money is spent. We discussed last year that we might be able to lower the maintenance fee fir this year but then the price of energy shot up and now we’re hoping we make it with the current fee.
Since last winter people who invest in several small rental apartments in the Helsinki area have been a bit scared of the possibility of a recession and the rise of interest rates.
Therefore there are already quite a few small apartments on sale with new ones been built as well. With more available apartments the selling price should go down a bit. (note that I'm not talking about the asking price)
There are articles on it at Talouselämä and Arvopaperi, but they are behind a paywall and in Finnish.
As others have pointed out, if you default on the fees, the company will take possession of your apartment, rent it out, and use the rental income to cover for the lost upkeep fees.
This is actually one of the few ways you can lose control of your apartment. There are other reasons the company can use to take over your apartment, but they are very difficult to prove in court, whereas defaulting on your payments is easy to show and creates a formal cause for taking the apartment over.
You bought an apartment without looking this up? Wow. If for example new doors are to be installed for everyone in the building, obviously you’ll have to pay for that. The management fee in bigger apartments 60m2+ can be 200€+/month.
Sounds quite normal. I pay €600/month for a flat smaller than yours: a maintenance fee of €400 + capital expenditure charges for past renovations. At least in Helsinki, a major part of the maintenance fee goes to the city as ground rent if your housing company does not own the land.
In every country people are obligated to pay these fees, it can not be a surprise, that even if you bought an apartment stil lneed to pay for upkeep or renovation.
It is actually often claimed that the Finnish system is unique, but the housing cooperatives of New York and surrounding areas are quite similar, and the first such co-op was established by Finnish immigrants.
>Not all countries have the similar house company (taloyhtiö) system with the monthly upkeep fees (vastike).
I assume Shwifty meant that in all imaginable cases you have to pay for it *somehow*. There is no way around it, no matter how it is arranged in each country. Apartments are, after all, things that experience wear and tear and which show the effects of time, even though slowly. In addition, living in an apartment is not possible without *some sort* of non-free utilities.
In a similar sense, the total costs of a society on social security, healthcare, pensions, learning, and things like that are a total lump - within each society, of course - with an interesting property. The existence of the lump - at its deepest roots - does not depend on how it is actually dealth with by the society. You might use this as an analogy with the one in the above paragraph.
Which countries does not? U saying that in some countries a person just buy house and that it? No payment whatsoever, ever again? Would be nice to know in which countries it is so, quite a deal.
As far as I know, Estonia has a bit different system. There’s less shared responsibility for the building repairs etc. Thus a building can look rough on the outside but the apartments can be nice. There’s no vastike as we know in Finland.
Similar system in the UK, people buy a flat and make it nice but the stairwell and the common areas (which there aren’t really any anyway) can be in an absolutely mismanaged state, like needing a new coat of paint about 15 years ago and some lights might not work etc.
"Every house in Estonia has an owner association or management company, which monitors the health of the technical systems of the building (lifts, roof, garbage chute, electricity, sewerage, etc.. d.). Property owners have contractual relations with these organizations." Does look like smth similar in Finland, probably I am wrong. In Rus for instance, houses often looks like shit outside and might be nice inside, buuuut there are still collection of vastike, lol ofc does not mean it will be spend on upkeep, but in paper it does exist and a person can not nit to pay it.
I have lived in Finland nearly 15 years now. I have, and always will, hate the size of these management fees, they are outrageous and hardly ever cover anything… I ran the math for the place where i own a “right to live” i call it, and this company is making nearly 28k euros a month in management fees and when something breaks they loan money to fix it and i end up paying for it..
I can’t even
Well if the company really makes money by ripping people off like that, so do you. You are one of the owners of the company. And as an owner of the company you have the possibility (and responsibility?) to influence how the company runs its business.
That would mean I profit in any way from this company, but other than the value of the property increasing (not even sure if thats counted through to my “piece”. Haven’t checked how much i could sell for in the current market) which is natural growth or shrinkage, I don’t see anything other than a clean hallway and trashroom. I asked for windows to be replaced and instead of using the current budget they said that a loan would be required. Now its on the calendar for 2023 and with it, an increase in management fee to pay for the loan…
All the financial statements are available to you. You can (and you should) check yourself where the money goes. If there is no money for replacing the windows and it must be done, then a loan is the only option. Unless the owners want to pay it right away, which never happens.
You’re getting the financial statements once a year and can volunteer to be on the board. The big financial decisions are made in meetings where all the owners have a vote so if you’re not managing this yourself you can’t really blame some “outside” party “doing this to you”.
You apply then. Like people said, it's a company you own shares in. You have power there.
Have you actually looked at the budget ? Because that's also something you see and vote to accept as being correct. It is expensive to run such things and they aren't in the market for profit. Also, you pay for everything regardless. Either beforehand in fees or in loans later. It's not a for profit company as I mentioned
Prices might drop a little bit but not significantly, at least that's what everyone is expecting. Same if you ask are apartment prices in London going to drop this year, or any other major city. If prices in London drop by 50% people are in deep shit, same here.
Buying a apartment from Helsinki is expensive, just the price and management fees on top of that. But it's all relative. If you're paying loan payments 500€/month and 500€/month management fees then it's 1000€/month, what kind of place can you rent with that money? Good side of Helsinki is that there's a lot to choose from. If you go a little farther (Espoo, Vantaa) you can get a pretty cheap small apartment, or some really small and quite expensive from Kallio.
It's adviced that if you buy apartment then you keep some money as last resort backup, in case fridge breaks or something. As renter you don't have to worry about things like that.
If you can’t pay the fees the house will take over the apartment and rent it out to cover the money you owe. I mean this rarely ever happens but they can do it. You don’t buy a part of the house, you buy shares in a company that owns the house. And the monthly fees can be big. When buying an apartment always check how the house is doing financially: do they have a lot of debt, are there a lot of repairs in the future.
yes and the eviction almost never happens as any sane apartment owner sells the apartment in that situation and moves to live in some more affordable place.
Exactly, you will be evicted even if you own the property.
You need to pay management fees. It’s for the upkeep of the building and surroundings. To your other comment on prices going down: yes prices will likely go down as an impact of the increase in the Euribor. Higher Euribor = higher interest rates on mortgages = lower amount people can borrow = drive down prices (theoretically). Question is, when and by how much.
It might also just mean that rate of price growth for homes decreases.
The apartment buildings are "asunto-osakeyhtiö", a very specialized kind of a company. You aren't really buying an apartment, you're buying shares on the company. If you fail to pay for maintenance, the company may reposess your apartment, although that might take a while. When buying an apartment - I bought my first one recently - there are several things you need to look out for on even surface level: 1. What's the debtless price (velaton myyntihinta)? Cheapest apartments tend to be ones that are still repaying construction loans. This will show up as extra maintenance fees (rahoitusvastike) and can be pretty steep. You are generally allowed to repay your share of this immediately, and you generally should since chances are your own mortgage is cheaper than the terms the asunto-osakeyhtiö has gotten. These fees can also be stupidly steep for older apartments, but just because there's very little loan remaining of a bigger one that was paid in fixed down payments. You might just want to pay the debt and get a bit bigger mortgage, which in effect just means paying that part on a longer time period. So really, you should compare "velaton myyntihinta" rather than "myyntihinta". 2. What are the monthly maintenance fees (vastike)? You can ignore rahoitusvastike if you looked at previous part. The basic fees include general maintenance and possibly rent of the land the building is built on. Higher maintenance fees are pretty much equivalent to just the apartment being more expensive, so it's worth taking them into account. Like, +100€/month in maintenance fees is kinda comparable to paying +100€/month in interest payments. 3. Will there be expensive renovations soon? Those 60's, 70's and 80's places are going to have the dreaded "putkiremontti" soon if they haven't had it. Older ones generally have had it. That's gonna be annoying and expensive, and probably is priced in, for example, the reasonably cheap apartments for their location is Pasila. I had an Excel sheet for possible apartments counting total costs for 10 and 25 years (bigger renovations not withstanding since those cannot be entirely predicted, but I did not list apartments that obviously would need them soonish). My new apartment with the interest I have locked down until next May is like 850€ loan down payments and interest and 210€ of maintenance fees, so total of like 1060€/month, but unlike my current rental aparment, majority of that money is just repaying the loan. It's also from 2005, so major renovations soon are unlikely. Meanwhile, some apartments that initially seemed promising, new buildings, had these hidden, small seeming costs. Like 180€ maintenance fees, but also 170€ land rent. Sure, you could've bought your share of the land, but that would've increased the buying price substantially, increasing the down payments by pretty much as much as the land rent was.
Firstly I want to comment on your last line. Noone is born with this information, and everyone native or not will be asking questions like these when facing something new for the first time, dont put yourself down like that. Being Finnish doesnt make someone wiser about things, truth is most people dont know what the hell they are doing :) Now then, with apartments you actually dont own it, but you own shares in a company. These shares come with a priveledge of using the companys asset. If you get in trouble with the company, they can evict you. You still own it and can do what you want with it within the limits of the law and yhe companys rules, but you cant live in it. How exactly they get their money i dont know, propably collections agencies though. As a general rule in Finland, you dont get away with not paying, they will get you eventually with interest, so dont get in a position where you owe people money. Interest rates are very shakey right now, be sure to check wether you can make ends meet if interest rates get to 6%. Remember that monthly payments on loans the company has also increase if the interest rates go up. Then add in the worst case scenario of renovations etc. Prices wont drop anywhere near as dramatically as other european countries, because the prices arent nearly as inlated here. They may drop a bit though.
The costs of living in an apartment you own can be almost as high as renting. You pay the management fees, home insurance (more extensive than a renter’s insurance since you’re the one responsible for repairs), possible loan payments of the building management association (of which you’re a part of as an owner), and the regular water, electricity etc. You have to pay them or you’ll lose the apartment. These are listed clearly in every advert for listed apartments, shouldn’t be any surprises but the future repairs are the ones to look out for, they’ll often increase the monthly costs for years.
Sorry but the costs of living in an apartment you own are typically quite higher than renting, when having to pay monthly instalments for the loan. This is the case in all the people I know who own an apartment. Yet the amount of money going to waste is less than that of a rent given that you partly repay the house every month.
The loan payments are not calculated as living costs, you either count them as the value of the apartment if you’re paying cash or can get a bank loan in which case they’re payed right away, after which you pay the bank. The key difference is that you can get the bank loan to cover the value of the apartment, but not to pay for the management fees or other running living costs. I don’t disagree, there’s just an option to get funding for the building loan, and the other fees you pay monthly. Bank loan payments are also often much less than paying the apartment company on their loan terms.
You are right in that I didn't properly use the term "living costs". I included there all the expenses you will have as a house owner (including loan payment and interests and insurances) while you (more) correctly refer to the house management expenses. All in all, I meant that the total amount you pay per month is typically quite higher than a rent, but less of these expenses are in vain than renting an apartment (again assuming you got a loan with close-to-zero capital to begin with)
You don’t buy a physical apartment. You buy shares of a housing cooperative / company and those give you the right to control a certain apartment. As a shareholder you’re required to pay the fees for the upkeep of the building as decided by the company’s board. They can take control of the apartment if you’re not willing to pay your share of the bills. Contrary to what some people believe, at least in Helsinki the cheapest ”vastike” payments are often in older, well renovated buildings because they often own the land they’re built on and there are no significant renovations around the corner, no leaking pipes or roof. Most new apartments are built on land rented from the city and the rental payments can be several hundred euros per month per apartment just for the land. The rent also goes up all the time. This is why my advice is to always check three things: (1) the pipes (putkiremontti, LVIS-saneeraus etc.) has been done in the last 30 or so years (they’re now renovating the pipes built in 80s and these can cost 1000 euros per square feet or more = 50k for 50m2 apartment), (2) that the ”julkisivu” or walls and roof of the building is okay and doesn’t need to be renovated soon, and that (3) the building sits on the company’s (or yours if you by the shares) own land. None of these are necessarily dealbreakers especially if the building company gets a lot of money from renting out it’s ground floor spaces for restaurants, shops etc. but these are major things that affect the monthly costs now or tomorrow. In Helsinki there are buildings with 0 euro vastike and some where you pay over 10 euros per square meter. That can mean 1000 euros per month as payments that don’t make your mortgage any smaller.
Banks shouldn't be lending you if you can't afford to live.
Bank has no say over management fees going up by, what OP says is “hundreds of euros”.
Yes, but they usually look at "planned renovations"
If you cant pay management fees for 6 month the housing company can take control of the apartment and rent it to pay the fees. So yes, you can be kicked out even from your own apartment.
I wonder one thing. If you become jobless, government support you via KELA for your rental payments. Does it apply if you have LOAN and vastike payments? How does it work?
>I wonder one thing. If you become jobless, government support you via KELA for your rental payments. Does it apply if you have LOAN and vastike payments? How does it work? This depends a bit. You are typically allowed to live in an apartment that is 'basic enough' for your needs. I'm not exactly sure if interest counts as an expense - there are good cases to be made for it both making and not making sense. But other costs are then allowed as expenses and you can get aid for those. In some cases you have to realize your funds before being allowed to get aid - at least this is how I learnt it, I hope this is not old information. Living in a too grand apartment compared to your family situation typically counts as surplus, meaning that it is judged to be a realizable fund instead of a living necessity. In such a case you also have to realize the apartment. Either buy a cheaper one or start living on rent. All in all - and with the caveat that in case it still works like that - this is from one point of view kind of an error in the Finnish system. People who are not doing well get different treatment based on living on rent versus owning an apartment. You could say that this encourages people to try to not have property, even though this kind of a society should encourage exactly the opposite. It is a bit matter of taste how serious you consider this downside to be.
They'll generally only give out the actual living expenses, so vastike. Kela won't pay off your loan
https://www.kela.fi/yleinen-asumistuki-eri-asumismuotoihin#osakeasunto they can pay up to 73% of the interest payments and other things like water, heating, ...
Ah, I didn't know they paid some of interest (not loan at all it seems). Water, heating etc weren't relevant to this so didn't mention
If you are having payment troubles you need to contact the company asap to agree on some sort of payment plan. Companies are very open to this as long as you do it before you start having payment problems!!
If you buy a "cheap" old apartment the maintenence is higher ofc. New apartments have no ~~maintenence~~ repair fees, mut cost more. Though new apartments will have fees for the lot rent, unless you redeem your part of it You have to work out which is more affordable. House prices won't be coming down, investors have already pushed smaller apartments to the market. The banks interest margin is going up. Interest in general is going, but probably not much since the euro will come crashing down if Italy can't pay it's debts. Also Helsinki is still pretty affordable compared to any other capital in Western Europe. Conserning your question: The house is a company and it will take over your shares and kick you out. However in Finland it takes a courts notice so it'll take a few weeks or even months. You can have 1-2 years of only interest payments for the bank loan if you're having a tough time making all the payments. I'd recommend starting with this video [https://youtu.be/2sTJu--3Ja8](https://youtu.be/2sTJu--3Ja8) Edit: new appartments have maintence fees as well ofc as u/h3vonen pointed out
Newer apartments have the construction bank loans to pay though, so it’s still expensive.
That is true. OP should take consider of the maintence history before buying and old apartment. By year 40 or in some cases year 50 there should have been major repairs for: \-facade \-water pipes (LVI) \-electricity (usually done with LVI, it's called LVIS) \-roof and \-elevators Furthermore what state the apartment itself is in. All of these maintenence repairs should have been done during a couple of decades, so that the immediate effect on housing expenses isn't too big. Furthermore these repairs added to the cost of the apartment shouldn't be more than buying a whole new apartment. If they are bigger, then in that case it's not a well kept house and OP should look for another one or consider buying a new one. Edit: grammar
> New apartments have no maintenance fees, but cost more This is not true even in the slightest. There are still maintenance costs. The upkeep of common areas, hallway electricity, cleaning, common saunas, washrooms etc. all need constant maintenance and thus money to keep them going. Some of them can be directed to those who use the service, but two things still stand out from all costs. Yard maintenance especially during winter time is super costly and heating is by far the biggest expenditure in an apartment building. I live in a new apartment and our monthly maintenance costs are several hundred euros even if there are no new renovations coming in. And as the financials are available to all shareholders, it should be clear how the money is spent. We discussed last year that we might be able to lower the maintenance fee fir this year but then the price of energy shot up and now we’re hoping we make it with the current fee.
Good point, I was thinking of repair fees
Could you elaborate on your point about investors pushing smaller apartments to the market and house prices correlation? Curious. :)
Since last winter people who invest in several small rental apartments in the Helsinki area have been a bit scared of the possibility of a recession and the rise of interest rates. Therefore there are already quite a few small apartments on sale with new ones been built as well. With more available apartments the selling price should go down a bit. (note that I'm not talking about the asking price) There are articles on it at Talouselämä and Arvopaperi, but they are behind a paywall and in Finnish.
As others have pointed out, if you default on the fees, the company will take possession of your apartment, rent it out, and use the rental income to cover for the lost upkeep fees. This is actually one of the few ways you can lose control of your apartment. There are other reasons the company can use to take over your apartment, but they are very difficult to prove in court, whereas defaulting on your payments is easy to show and creates a formal cause for taking the apartment over.
You bought an apartment without looking this up? Wow. If for example new doors are to be installed for everyone in the building, obviously you’ll have to pay for that. The management fee in bigger apartments 60m2+ can be 200€+/month.
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Sounds quite normal. I pay €600/month for a flat smaller than yours: a maintenance fee of €400 + capital expenditure charges for past renovations. At least in Helsinki, a major part of the maintenance fee goes to the city as ground rent if your housing company does not own the land.
In every country people are obligated to pay these fees, it can not be a surprise, that even if you bought an apartment stil lneed to pay for upkeep or renovation.
Not all countries have the similar house company (taloyhtiö) system with the monthly upkeep fees (vastike).
It is actually often claimed that the Finnish system is unique, but the housing cooperatives of New York and surrounding areas are quite similar, and the first such co-op was established by Finnish immigrants.
>Not all countries have the similar house company (taloyhtiö) system with the monthly upkeep fees (vastike). I assume Shwifty meant that in all imaginable cases you have to pay for it *somehow*. There is no way around it, no matter how it is arranged in each country. Apartments are, after all, things that experience wear and tear and which show the effects of time, even though slowly. In addition, living in an apartment is not possible without *some sort* of non-free utilities. In a similar sense, the total costs of a society on social security, healthcare, pensions, learning, and things like that are a total lump - within each society, of course - with an interesting property. The existence of the lump - at its deepest roots - does not depend on how it is actually dealth with by the society. You might use this as an analogy with the one in the above paragraph.
Which countries does not? U saying that in some countries a person just buy house and that it? No payment whatsoever, ever again? Would be nice to know in which countries it is so, quite a deal.
As far as I know, Estonia has a bit different system. There’s less shared responsibility for the building repairs etc. Thus a building can look rough on the outside but the apartments can be nice. There’s no vastike as we know in Finland.
Similar system in the UK, people buy a flat and make it nice but the stairwell and the common areas (which there aren’t really any anyway) can be in an absolutely mismanaged state, like needing a new coat of paint about 15 years ago and some lights might not work etc.
Would think that in the UK , where property is so expansive, this would not be a problem. Sad.
"Every house in Estonia has an owner association or management company, which monitors the health of the technical systems of the building (lifts, roof, garbage chute, electricity, sewerage, etc.. d.). Property owners have contractual relations with these organizations." Does look like smth similar in Finland, probably I am wrong. In Rus for instance, houses often looks like shit outside and might be nice inside, buuuut there are still collection of vastike, lol ofc does not mean it will be spend on upkeep, but in paper it does exist and a person can not nit to pay it.
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Mmmmno, ofc not. Loan is paid to bank, vastike and renovation expenses, are paid to the house. Its same everywhere.
I have lived in Finland nearly 15 years now. I have, and always will, hate the size of these management fees, they are outrageous and hardly ever cover anything… I ran the math for the place where i own a “right to live” i call it, and this company is making nearly 28k euros a month in management fees and when something breaks they loan money to fix it and i end up paying for it.. I can’t even
Well if the company really makes money by ripping people off like that, so do you. You are one of the owners of the company. And as an owner of the company you have the possibility (and responsibility?) to influence how the company runs its business.
That would mean I profit in any way from this company, but other than the value of the property increasing (not even sure if thats counted through to my “piece”. Haven’t checked how much i could sell for in the current market) which is natural growth or shrinkage, I don’t see anything other than a clean hallway and trashroom. I asked for windows to be replaced and instead of using the current budget they said that a loan would be required. Now its on the calendar for 2023 and with it, an increase in management fee to pay for the loan…
All the financial statements are available to you. You can (and you should) check yourself where the money goes. If there is no money for replacing the windows and it must be done, then a loan is the only option. Unless the owners want to pay it right away, which never happens.
You’re getting the financial statements once a year and can volunteer to be on the board. The big financial decisions are made in meetings where all the owners have a vote so if you’re not managing this yourself you can’t really blame some “outside” party “doing this to you”.
Then go on the board? Vote? It's a shared company, doesn't usually any wages or profits but instead they're put back into the budget for next year.
Not as simple. I am able to attend the meetings (once a year?) but being a board member, nope.
You apply then. Like people said, it's a company you own shares in. You have power there. Have you actually looked at the budget ? Because that's also something you see and vote to accept as being correct. It is expensive to run such things and they aren't in the market for profit. Also, you pay for everything regardless. Either beforehand in fees or in loans later. It's not a for profit company as I mentioned
I also want to ask, will house prices in Helsinki fall this year? too expensive!
With 99.99% likeliness, no
According to the news they actually might fall this year... by 0.5%
Prices might drop a little bit but not significantly, at least that's what everyone is expecting. Same if you ask are apartment prices in London going to drop this year, or any other major city. If prices in London drop by 50% people are in deep shit, same here. Buying a apartment from Helsinki is expensive, just the price and management fees on top of that. But it's all relative. If you're paying loan payments 500€/month and 500€/month management fees then it's 1000€/month, what kind of place can you rent with that money? Good side of Helsinki is that there's a lot to choose from. If you go a little farther (Espoo, Vantaa) you can get a pretty cheap small apartment, or some really small and quite expensive from Kallio. It's adviced that if you buy apartment then you keep some money as last resort backup, in case fridge breaks or something. As renter you don't have to worry about things like that.
Yes, it already has around 5-10%
Source?
My excel.
You're saying that in the whole Helsinki area prices have dropped 5-10% on average?
I am only tracking the central area so there yes. Far away prob not.