Buying an older apartment

As the value of modern apartments has been increasing on the whole, there has been increased interest in the older units.

If older apartments and buildings are maintained at an acceptable level and  depending on the need for repair of such units compared to new units, you might conclude that older apartments have the upper hand.

There is a noticeable difference between the values of new and older apartments and depending on the quality of the apartment the difference can be large.

Older apartments have limited facilities and are often lacking parking and storage space, whereas collection of common expenses can be a problem for both older and new flats. The lack of double glazing, the mounting non-payment of the common expenses and the sometimes criminal happenings, such as the recent stabbing over a parking disagreement are facts to be considered.

The effectiveness of the administrative committee is of paramount importance for the smooth operation of a project, and the recent introduction of Airbnb with tourists having all night parties, is an added cause for concern. In one case involving a Larnaca apartment, a neighbour complained about the nuisance and his car was set of fire.

So the management of a project is worth investigating prior to a purchase. It is a good idea to interview three or four of the local residents in order to ascertain any latent problems that the building has. Due to the regrettable lack of a proper legal framework to regulate the operation of the common areas and expenses of a building, I suggest a buyer consider speaking to some of the residents in order to ascertain any problems that are not evident.

When comparing the common expenses of older versus new apartments, it is evident the latter category has much higher charges. This is another factor to consider.

What will it happen if the lift of a 20-floor building breaks down, while there are no funds or procedure to be followed for it to be repaired? The prevailing common expenses for a three bedroom apartment are around €40-€50 a month, how will the occupants pay the increased expenses of more modern units?

My approach would be to choose apartments that are 10-20 years old but in good condition within town centres, which  in general have a return of 5 per cent, whereas the more expensive ones have a much lower return, especially when taking into account the VAT of 19 per cent.

As circumstances stand at present comparing new and old units is not an easy task.

Antonis Loizou & Associates EPE – Real Estate Valuers, Estate Agents & Property Consultants, www.aloizou.com.cy, [email protected]