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Old 13.10.2020, 21:00
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Nebenkosten incl. erneuerungsfond too high

Hi everyone,

Quick question please. I am interested in buying an apartment which seems to have an unreasonably high nebenkosten, around 800chf/month(including 400chf monthly erneuerungsfond payment). So nebenkosten being 400chf per month for a 4.5z apartment I guess it's reasonable, considering that for my studio I pay around 200chf/month. Now what puts me in thoughts is the monthly erneuerungsfond payment which equals to 400chf (pretty high, or?) when the total sum of erneuerungsfond the building has currently is more than a million francs.

People who own or bought apartments, would you say this is normal or is there something I can't see clearly?

Thanks a lot!
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Old 13.10.2020, 21:03
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Re: Nebenkosten incl. erneuerungsfond too high

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Hi everyone,

Quick question please. I am interested in buying an apartment which seems to have an unreasonably high nebenkosten, around 800chf/month(including 400chf monthly erneuerungsfond payment). So nebenkosten being 400chf per month for a 4.5z apartment I guess it's reasonable, considering that for my studio I pay around 200chf/month. Now what puts me in thoughts is the monthly erneuerungsfond payment which equals to 400chf (pretty high, or?) when the total sum of erneuerungsfond the building has currently is more than a million francs.

People who own or bought apartments, would you say this is normal or is there something I can't see clearly?

Thanks a lot!
Difficult to say without knowing how large the building is, how old and in what shape.
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Old 13.10.2020, 21:06
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Re: Nebenkosten incl. erneuerungsfond too high

Sound they have depleted what reserve they had and need to stock it up. Owner should be able to tell what was repaired/replaced or even what will be repaired/replaced.
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Old 13.10.2020, 21:09
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Re: Nebenkosten incl. erneuerungsfond too high

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Difficult to say without knowing how large the building is, how old and in what shape.
Thanks for you answer. 100m 1974, okay shape. A fresh painting would be necessary to be honest before moving in
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Old 13.10.2020, 21:11
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Re: Nebenkosten incl. erneuerungsfond too high

Heating, roof? Windows? Ask the agent/owner
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Old 13.10.2020, 21:11
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Sound they have depleted what reserve they had and need to stock it up. Owner should be able to tell what was repaired/replaced or even what will be repaired/replaced.
Thanks for you answer.

According to the real estate woman, there is no big project for the next 10 years really. Weird thing is they have more than 1million in reserves but still are paying so much into it on a monthly basis.

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Heating, roof? Windows? Ask the agent/owner
Sorry I missed mentioning that. Agent said it's a mix of gas/oil at the moment and they are planning to renovate the whole thing in 10-15 years. Windows seem pretty okay, might renew in 10 years time she said. Not sure about the roof to be honest, I missed completely asking about that.

Last edited by 3Wishes; 14.10.2020 at 15:28. Reason: merging consecutive replies
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Old 13.10.2020, 22:38
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Re: Nebenkosten incl. erneuerungsfond too high

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Thanks for you answer.

According to the real estate woman, there is no big project for the next 10 years really. Weird thing is they have more than 1million in reserves but still are paying so much into it on a monthly basis.
One Million is nothing.
Picture it for one apartament only
Fassade 30-35k
Windows 20k
Cold water pipes 15k
Roof
Etc
Multiply it by number of apartments.
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Old 13.10.2020, 22:46
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Re: Nebenkosten incl. erneuerungsfond too high

You should not be relying on what the agent tells you.

You should ask to see the bookkeeping. Ask for the current owner, someone from the residents' committee and/or the managing agents to walk you through the finances of the block. Ask them to explain to you what they have spent money on over the past 10 years, and to set out their plans to use (and continue to top up) the reserves, along the lines of what memihai has listed.

That way, you will know the state of the block's finances and also of the way it is run. You will learn which parts are collective responsibility, and which costs you will have to bear, as an individual owner. Only buy if the rules and records of all of this are sound.

No proper accounting? No budget and plans for ongoing major maintenance? Or minutes of meetings showing that the owners are in dispute about these issues? Walk away.
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Old 13.10.2020, 22:50
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One Million is nothing.
Picture it for one apartament only
Fassade 30-35k
Windows 20k
Cold water pipes 15k
Roof
Etc
Multiply it by number of apartments.
Thanks Memihai.

I may have misunderstood then the whole idea of "buying is cheaper than renting" with the current low interest rates.Yes a fixed 20 years rate will make me pay a monthly installment less than what I would pay to rent the same apartment. BUT, when I add on top of that, monthly Nebenkosten and Erneuerungsfond payments then actually my monthly cash outflow shoots up and probably exceeds the rent I would pay. Am I missing something here or do I just don't get how it really works?

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You should not be relying on what the agent tells you.

You should ask to see the bookkeeping. Ask for the current owner, someone from the residents' committee and/or the managing agents to walk you through the finances of the block. Ask them to explain to you what they have spent money on over the past 10 years, and to set out their plans to use (and continue to top up) the reserves, along the lines of what memihai has listed.

That way, you will know the state of the block's finances and also of the way it is run. You will learn which parts are collective responsibility, and which costs you will have to bear, as an individual owner. Only buy if the rules and records of all of this are sound.

No proper accounting? No budget and plans for ongoing major maintenance? Or minutes of meetings showing that the owners are in dispute about these issues? Walk away.
That's a great advice! Thank so much. The more I think about all these details the more I get a headache I wonder if that is the reason many just stay away from buying a property.

Last edited by 3Wishes; 14.10.2020 at 15:29. Reason: merging consecutive replies
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Old 13.10.2020, 23:02
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Re: Nebenkosten incl. erneuerungsfond too high

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That's a great advice! Thank so much. The more I think about all these details the more I get a headache I wonder if that is the reason many just stay away from buying a property.
Yes it is. And opportunity cost. And what you mentioned about adding it all up being almost the same etc.
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Old 13.10.2020, 23:07
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Re: Nebenkosten incl. erneuerungsfond too high

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Yes it is. And opportunity cost. And what you mentioned about adding it all up being almost the same etc.
And that for many people, coming up with the cash for the down payment is equivalent to several years' worth of rent needing to be paid all at once.
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Old 14.10.2020, 02:21
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Re: Nebenkosten incl. erneuerungsfond too high

You can get royally screwed over with these charges. One often can't help but think something dodgy is going on. Also, what's to stop them putting the cost up by another 400 per month? This happened to me a number of years ago. The company claimed they need to raise x for the roof, per year which was in a good state of repair and put the rate up. The next year they wrote to say they need to raise x for the roof and put the rate up again. I sold up and bought a freehold. You're basically on the hook for the costs of maintaining the fabric of the building but have no or little control over its maintenance.
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Old 14.10.2020, 02:50
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Re: Nebenkosten incl. erneuerungsfond too high

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Thanks Memihai.

I may have misunderstood then the whole idea of "buying is cheaper than renting" with the current low interest rates.Yes a fixed 20 years rate will make me pay a monthly installment less than what I would pay to rent the same apartment. BUT, when I add on top of that, monthly Nebenkosten and Erneuerungsfond payments then actually my monthly cash outflow shoots up and probably exceeds the rent I would pay. Am I missing something here or do I just don't get how it really works?
buying isn't cheaper than renting right now with the high prices. in the last 4 years, I haven't seen a single flat (in my local area) that was financially sensible to buy. the only get out clause would be if interest rates stay low for 20+ years.
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Old 14.10.2020, 08:53
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Re: Nebenkosten incl. erneuerungsfond too high

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You can get royally screwed over with these charges. One often can't help but think something dodgy is going on. Also, what's to stop them putting the cost up by another 400 per month? This happened to me a number of years ago. The company claimed they need to raise x for the roof, per year which was in a good state of repair and put the rate up. The next year they wrote to say they need to raise x for the roof and put the rate up again. I sold up and bought a freehold. You're basically on the hook for the costs of maintaining the fabric of the building but have no or little control over its maintenance.
Surely thatís what you have the owners association for. We agree on what does and disagree on what does and doesnít need to be done. If we arenít happy with how the management agency are running things or the costs, then we fire them.

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buying isn't cheaper than renting right now with the high prices. in the last 4 years, I haven't seen a single flat (in my local area) that was financially sensible to buy. the only get out clause would be if interest rates stay low for 20+ years.
Thatís not a scenario I would rule out at the moment and you can already fix out to at least 15 years.
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Old 14.10.2020, 10:04
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Re: Nebenkosten incl. erneuerungsfond too high

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Surely thatís what you have the owners association for. We agree on what does and disagree on what does and doesnít need to be done. If we arenít happy with how the management agency are running things or the costs, then we fire them.


Thatís not a scenario I would rule out at the moment and you can already fix out to at least 15 years.
It is not necesarrily cheaper to buy vs renting, depends on the individual apartment and on the building.
It is cheaper if the apartment is a newer one.
It is not cheap if it is 30-40 years old.

The Swiss like to keep their buildings in a good shape. So if after 40 years the roof needs to be done, it will be done. You need to pay your part.
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Old 14.10.2020, 10:21
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Re: Nebenkosten incl. erneuerungsfond too high

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Thatís not a scenario I would rule out at the moment and you can already fix out to at least 15 years.
Me neither.
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Old 14.10.2020, 10:47
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Re: Nebenkosten incl. erneuerungsfond too high

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You can get royally screwed over with these charges. One often can't help but think something dodgy is going on. Also, what's to stop them putting the cost up by another 400 per month? This happened to me a number of years ago. The company claimed they need to raise x for the roof, per year which was in a good state of repair and put the rate up. The next year they wrote to say they need to raise x for the roof and put the rate up again. I sold up and bought a freehold. You're basically on the hook for the costs of maintaining the fabric of the building but have no or little control over its maintenance.
I agree on this one with you. I asked the agent who decides what is going to be those monthly payments and she mentioned that Verwaltung is suggesting it to the residents of the builing and then there is a voting conducted by the residents in regards to accept the proposal or not.

BUT again, if the voting is true, what could make them really accept such high monthly payments when the reserves are more than 1million chf? It was mentioned that this is not high really, sorry, but I have seen other buildings with 60-100k reserves so I am not sure what is a realistic reserve amount to keep on the side.
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Old 14.10.2020, 10:50
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Re: Nebenkosten incl. erneuerungsfond too high

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BUT again, if the voting is true, what could make them really accept such high monthly payments when the reserves are more than 1million chf? It was mentioned that this is not high really, sorry, but I have seen other buildings with 60-100k reserves so I am not sure what is a realistic reserve amount to keep on the side.

60-100k reserves is nothing, especially not in Switzerland.
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Old 14.10.2020, 11:17
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Re: Nebenkosten incl. erneuerungsfond too high

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60-100k reserves is nothing, especially not in Switzerland.
The more important point is does the purchase have to refund the seller his proportion of reserves? I recently discovered in France that you do, I was not aware of this when I purchased 20 plus years ago. Luckily the amount was 0.5% of the purchase price on a 17 year old building.
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Old 14.10.2020, 11:28
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Re: Nebenkosten incl. erneuerungsfond too high

No, you receive the reserve as part of the deal when buying the apartment.
So no additional costs to take over the reserve.
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