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maintenance fees in Egypt

Discussion in 'Egypt property' started by grays4u, Oct 17, 2007.

  1. grays4u

    grays4u New Member

    Having purchased in jan i was aware that the service charges where looking quite high on some developments £600/700 for 1 bed a little more in sahl.I think this is quite high as we know wages and the cost of living is very low and i think if you add this up on the number of units theres is a lot of profit being made. i have noticed a trend with properties in the low wage markets to charge as much as the uk buyer will pay and i do not think this is a true reflection of the costs. however my development is a more sensible £200 for a 1 bed and that includes the laundrey service on a development next to dessert pearl same builder. I think this a true refection of what this charge could be as these charges have been caculated in egypt by an egyption company and i am sure they will still make a heathly profit
     
  2. dave99

    dave99 New Member

    Total Package has to be used

    Maybe you can offer a bit more insight into this one - its a good thread !

    In isolation the amount for Annual maint fee is almost meaningless.
    You have to take into account how much profit is being held back by the developer to fund the early years, and also consider what restrictions, if any there is on the increase in charges after the first year, and what you choose to actually cover in the fee and what you exclude.

    Also if you have only a small number of units then the cost per unit is likely to be higher, if you have hundreds of units that have to share limited facilities it's easy to make a profit.

    Will you have an owners club or somethihg similar that will decide what to charge each year and what to include or exclude.

    .....
     
  3. Peter Mitry

    Peter Mitry <B>Egypt Forum Founder Member</B>

    It is generally known that management fees in Sahl Hasheesh are 1€ per m2 per month. On a one bed apartment of 64m2 this comes to 720€ per annum. Compare this with a similar project in Spain where you could be paying up to 1800€ per annum for a lot less facilities. A client of mine with a 3 bed unit in Estepona is paying 480€ per month, nearly 6000€ per annum!
    The fees in big resorts reflect a contribution to the vast expenses of 24 hour multi-point security, lighting, street cleaning and maintenance of public areas. At the outset it can only ever be a calculation and will normally be adjusted to reflect the true costs once the different communities are established and have they're own say.
    In the smaller developments in Hurghada where there is no 24 hour security and few facilities provided it should bever be more than 20€ per month.
     
  4. delboy

    delboy New Member

    i agree with dave on this one, it all eventually boils down to the size of the resort, 225 units conpared to 25 is a big different and should be reflected in the maintenance fee
     
  5. grays4u

    grays4u New Member

    my deveolpment is 250 units 2 swimming pools and gardens recieption 24 hr sercutity and may facilities and i said £200 per year next door same builder same spec but uk agents £600. Also i would have thought that security, lighting, street cleaning and maintenance of public areas was the resposibliity of the council and would be charged seperatly.The management compant set up will take say 150 units at £500 per year thats £75000 per year.thats a lot of money in egypt
     
  6. dave99

    dave99 New Member

    Comparing fees

    Thanks for the extra info - are selling at about the same sort of price per apartment - if so then either you have underestimated the likely costs or there is some serious over charging - maybe the correct fee is somewhere in between - what are you telling your owners about increases if you get the costing wrong after a year or two.

    ..
     
  7. grays4u

    grays4u New Member

    hi when i ment was by my development its the one i am purchasing i am not an agent or developer and i have the £200 per year written in my contract which i think could reflect a more realistic fugure for investors and i am opening the discussion to what is a fair price. i gave a Hyperthetical devleopment of 150 units at £600 would give £75000 wich i said is a lot of money in egypt if you are only looking after that one unit wages are so cheap hope that helps
     
    Last edited: Oct 18, 2007
  8. hair1982

    hair1982 New Member

    I have to agree with grays4u on this one, developers who are charging £600/£700 a year maintainance fees for 1 bed apartments is a bit excessive especially in the relitive infancy of the self catering market in egypt.
    The wages and cost of living are very low so surely this is an indication of greedy developers seriously inflating profit margins.

    I know there is the argument that it is all down to the spec of the development, etc. etc. but relitivley £600 is alot of money in Egypt
    and therefore is not true value for money.
     
  9. dave99

    dave99 New Member

    Fee increases ???

    Thanks for the clarification - seems to me the most likely issue for you the other owners is how do you control the annual charge AFTER the first year - do you have a fixed charge for a period of years or just first year.

    It is not unknown to have a "loss leaders" in many selling situations, therfore it's back to what is the total package cost.
    Put simply I could offer FREE maintenance for the first 5 years and simply add £1500 or something to the initial charge if this seemed to be important to the "market" that I'm selling to, or do it the other way around make annual fees £600 and drop the base price by £1500.

    If your apartment is being sold at a little over price then that explains some of the difference.

    If you need objective help we need more info please.

    ...
     
  10. awahee123

    awahee123 Banned

    Hi suleder is supposed to be £200 per year however I have seen them now advertising at £400 per year so well see,maintenance should be minimal for at least 2 years.
     
  11. dave99

    dave99 New Member

    £400 pa look nearer to the "norm" maybe they have made a mistake at the original £200pa
     
  12. awahee123

    awahee123 Banned

    I think your right however that is what they told me so well see mine will be ready end of march I wont cry if its £400pa
     
  13. propertywatch1

    propertywatch1 <b>Official Photographer</b>

    I think the annual maintainace charges are the biggest con of all.
    I pay 150 le for maintainance in my apartment block per month.
    There are 16 units here...ok not big..but for this i have a large pool which is cleaned twice sometimes more a day
    and is checked regular by the chloren guy.
    We have 24 security and is cleaned constantly..it covers the out side lights bell boy etc.

    We also have a part villa on Mubarek 7 where an English developer is charging £850 a year...just to clean the pool and 24 belboy...how do they get away with it.
    There is a charge of £120 when you buy on mubarek 7 to join the residents unity which covers the general maintainace of the area this is a ONE OFF payment.
    All i can see is that the developers see the annual charges as an excellent additional income


    Ex-Boltonian living in Hurghada
     
  14. dave99

    dave99 New Member

    Good to see real numbers

    Any idea how the annual fee is determined - do you get to see all the costs - who pays if there is any "big" item for repairs etc.

    A low initial charge (first 2 years or so) is easy to "sell" the real test is long term - do you have any guarentee that fee will not jump in a year or so.

    I have to agree that £850 to £1000 a year seems excessive and the people who buy into such developments must have money to burn, or did not have the sense to check this before they bought.

    To "defend" developers (just a little) - maybe the initial charge cost is not really known (hence my questions) and there will be a "pool" of money to work with over time, not just for the first few years when cost should be low, also potentially, if there is a "club" the excess can be re-paid at some point as long as it is ceratin that the money is not needed.


    ..
     
  15. propertywatch1

    propertywatch1 <b>Official Photographer</b>

    Ok...if the developers built correctly there wouldn'nt be any extra costs for any work.
    if the development has just been built why would there be any "big work ".
    the MAINTANCE COST should cover the funds for the maintance of the building which shouldnt need repair work if only just constructed.....and living here the costs of wages to employ staff to clean etc is minimal.


    Ex-Boltonian living in Hurghada
     
  16. dave99

    dave99 New Member

    How do you decide what to pay

    How do you decide what to pay.

    I assume that someone works out an annual budget for likely costs, then they add in something for "unknowns" and divide by the number of people who pay, make an allownace for those who do not pay and come up with a figure. If that is too low the you run out of money, if it's too high you have a surplus which you can decide where to spend.

    Assuming that you start with a perfect building I agree there should be very little to do for 2 or 3 years. After 3 years or so who pays and how much.

    Do you get to know all about your costs or not.

    Do you have any lifts.
    Do you have mains water & sewerage
    Do you have any shared garden furniture
    Do you have any "common" facilities such as bar, garden, car park, roof area etc.


    ...
     
  17. dave99

    dave99 New Member

    £800 Annual Fee for a 1 bedroom apartment - Hurghada - ouch !

    Just seen an ad for new development due to be ready 2009/10 which is asking for £800 annual maint fee for a 1 bedroom apartment in Hurghada - is this realistic - seems to be based on a percentage of the apartment cost, which is expensive for Hurghada.

    ..
     
  18. awahee123

    awahee123 Banned

    Is it not possible for all the owners of the development to form their own pot for maintenance charges?
    In other words take control of looking after the development by forming a residents commitee ,after all the developments are freehold and collectively belong to the investors.
    I think we will see a sharp rise in maintenance fees once purchasers move into their developments as its going to be a big money spinner especially on the larger developments.
     
  19. queenie40something

    queenie40something Senior Member

    As there are people that are buying in other areas and not just Hurghada I have renamed this thread.
     
  20. queenie40something

    queenie40something Senior Member

    Sierra Nabq Bay Sharm

    Hi all

    Our maintenance fees are as follows:

    1 bed apartment - 55sqm = £1500
    2 bed apartment - 110sqm = £3000

    Maintenance fees are paid only once in a lifetiine on handover and are refundable upon selling.

    The new owners then pay £1500.
     
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