Q1 2021 ends much like last year's Q1 ended in the middle of a pandemic. One full year of the corona pandemic; crazy to think a year ago, it all started. Now with the first quarter of 2021 finished, it's time to take another look at my portfolio and see how it faired during these challenging times. Did my portfolio continue to rocket to the moon, or did it orbit a bit and crash back down?
Last Updated on March 30, 2021 by Mr. FightToFIRE
While we are crawling closer to the delivery date of our baby girl (27 May), there is another delivery that is causing more headaches: my heavily delayed turnkey apartment.
Progress is being made of course, but at the current speed, I shouldn’t expect a delivery sooner than March 2022. Given these delays, I was startled when I recently received a mail about the fit and finish of my delayed turnkey apartment. My shock continued when I saw the standard finish and how much they charge for extras.
These finishing details were sent right after I received the second invoice as stipulated in the deed.
It’s as if they act like the apartment will be finished soon. Most likely they are looking to get our cash as soon as possible.
Hidden downsides to a turnkey apartment I wish I realized sooner
One of the big selling points of turnkey apartments or houses is the idea that you pay a certain price and you get a finished house at the end. You literally just have to turn the key and enjoy your new home.
Almost every developer promotes this way of working as easy and worry-free for the buyer but as I have experienced, it’s anything but worry-free. Even though you usually pay a hefty sum for these turnkey apartments, but even before you can enjoy it, extra troubles pop-up.
You are at the whims of the developer and the (sub)contractors
The biggest grievance has to be this. If it’s your own house and project, you can at least push and try to mitigate any delays your contractors might face. But when you work through a developer, you better hope they are open about their process. But if online -and my own- experiences are anything to go by, don’t expect them to be.
Even as my apartment clearly won’t be finished by the agreed and contractual delivery date, I have yet to receive any official correspondence from the developer let alone a reason for the delays.
The deed provides compensation for delays (for anything besides force Majeure), but enforcing these fines is near impossible due to the skewed power position.
As just one person not directly involved as the client, it’s not possible to clearly prove the delays are due to incompetence or mistakes.
In fact, they continue to provide updates as if things are moving along as expected and even send out correspondence on the finishing touches, at an extra cost of course.
Details of what is and isn't in the initial specifications matters
In my breakdown of reasons to get a turnkey apartment, I mention the choice between a completely finished house or a hull that you finish yourself. A finished house might cost extra but it will be done according to your preference. What I didn’t realize at the time was that the definition of “finished” can be interpreted in different ways as well as what “paid for it” means.
Your understanding of finished is different from the developers’
What you will get is all in the initial specifications of the apartment. The developer is required to provide this. However! The details vary and if they are not clear on the specifications, rest assured, corners will be cut. For my apartment that means:
- A fridge and freezer are provided but the actual size is omitted. A reasonable size is an extra €800.
- Same with the finish of the kitchen. By default it’s not completely closed up, this is an additional cost of €280.
- The size of the bathroom sink is not mentioned. I now know it’s 60 cm by default (small!) and increasing its size is #460. Increasing the size does mean a larger shower is not possible.
All of which is excl. VAT of 21%. There is more but these are the more obvious ones.
All in all, having a completely finished turnkey apartment will set me back another €6,808.75 + 21% VAT = € 8,238.59.
Mind you, this is without the heavily suggested furniture packages which was the finish I thought they meant during the talks before buying the apartment. Having the apartment furnished and ready to let, will be another €15,000!
You are the buyer; They are after your money, so be very meticulous before signing
My main advice after having gone through the experience of buying a turnkey apartment is the following.
The developer is looking to sell all of his apartments as soon as possible. So while talking to one of their “advisors” know that they are specialized in selling their apartments or houses to customers like you.
Knowing that, look into every detail of the apartment. Don’t take anything they say at face value. Are they emphasizing the fact they provide quality built-in kitchen appliances? Ask what type or even how big, i.e., the size of the fridge.
Do they promise they communicate clearly, let them show it through examples.
Finally, regardless of what you hear, know that you are in the weaker position. If they don’t sell it to you, they’ll most likely sell it to someone else. However, don’t let this pressure you into jumping in. Don’t believe for a second this specific apartment or house is the only one available.
My final thoughts and decision
Am I salty for seeing these absurd prices and having my hands tied behind my back? You bet I am.
In theory, I can always not take these extra finishes, but that’s just theory. The “standard” fit and finish is basic for the rent fork that I’m aiming for.
On top of that, due to it being an apartment, the use of space is very important. Case in point, there is barely any room for a separate freezer. Without a decent fridge-freezer combo, the apartment will have a clear downside resulting in it being less attractive to potential renters. Same for the bathroom.
As a result, I’m half-forced to take the extra finishes to make it appealing. Not that I’m throwing away money, but the feeling of having been played is very strong.
All in all, it has been an eye-opener, to say the least. However, sulking on it won’t change a thing. I will move forward and select the best possible combination of finishes to create an apartment that renters will enjoy and call home.
12. Startling Extra Costs To Get A Better Turnkey Apartment