How are the housing company’s finances?

According to Jussi Pajala, the first thing you should look into is the housing company. Ask the real estate agent to provide you with the relevant housing company documents. Carefully go through the financial statements, balance sheet and other documents to find out the housing company’s financial standing. You should also read its financial statements from previous years to see how it has managed to run the building with the charges for common expenses it collects.

Well-managed housing companies have gradually built up buffers to pay for small repairs, such as changing locks. The housing company should have set aside at least the equivalent of two to three months’ charges for common expenses. 

If the housing company has repeatedly charged the homeowners extra, this could be a sign that its financial planning is lacking.

What renovations are the home owners allowed to carry out?

First read the responsibilities and obligations laid down in the housing company’s Articles of Association. Ask the property manager about renovation policies and if there’s anything in particular you need to take into consideration. 

Let the property manager know about your renovation plans and check that you’re allowed to make these changes. You can also find out how the housing company will be involved in the renovation project and what practical issues you need to deal with in terms of building supervision and permits. 

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Does the housing company have any renovation plans?

Investigate the condition of the building. Check what renovations and repairs have been carried out and what is planned. You’ll find information on completed renovations and repairs in the property manager’s certificate, and upcoming repairs are listed under the housing company’s long-term repairs plan. These documents also help you determine how successful the housing company has been in making decisions and planning ahead.

Before you buy an apartment, you should also find out the impact of any upcoming renovation projects on the apartment in question. If the housing company is planning to update its plumbing, will you have to share the costs even if the bathroom in your apartment was recently renovated?

If you’re looking to buy an apartment in a new build, you won’t have to worry about renovation plans for a while. But it’s good to find out if anything of note happened during the building process. Ask the property manager if any building defects were identified and whose responsibility it is to fix them. New builds may also need some repairs that are covered by a builder’s warranty.

How much are the monthly charges?

Find out the factors that will contribute to your living costs. Does the housing company own or lease the plot the building is located on? If you’re buying a home on a leased plot, the charge for common expenses may rise significantly when the lease agreement is renewed or if the index based on which the lease is determined is reviewed. Check how much the charge for common expenses is and how it has changed over the years. Find out also if there is a need to increase the charge in the near future.

Also check if the housing company has taken out a loan a part of which is allocated to the apartment you’re about to buy and how much the charge for financial expenses is. The charge for financial expenses may rise significantly in a new build once the initial payment holiday is over or in an older apartment as a result of a plumbing or exterior upgrade. If the housing company has taken out a loan which is not hedged against rising interest rates, fluctuations in the reference rate may also affect the charge for financial expenses.

In addition to the charge for common expenses, the charge for financial expenses and your monthly loan payment, you shouldn’t forget about other living expenses, such as utility bills and insurance premiums. 

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Read more about the charge for financial costs

What is the housing company’s transaction history like?

Whether you’re planning to buy an older apartment or a new build, you should try to find out information from public sources about the apartments that have been sold in the building. The transaction history will tell you how those apartments changed hands and how much they were sold for.

Pajala encourages people to explore their options, as seeing many different types of properties will help you get clarity on your dream home. Think about what’s important to you in owning a home.

At home viewings, you should let all your senses guide you and also look for practicality. You should ask about the housing company’s common areas, which can significantly increase your satisfaction with your new home. After a viewing, go for a short walk to explore the area and take time to look into the services, transportation links and leisure facilities it offers.

Some pages worth reading if you’re planning to buy a new home