Poor management in an apartment building can reduce the market value of a flat by up to 20%. Prospective buyers withdraw or lower their offer when they realize that a building is in poor operational condition.
What are these factors? Common areas directly affect the market value of each apartment: garbage in the courtyard, unpruned trees, broken tiles, deteriorated balconies, dirty walls with faded paint, non-functioning lights, and elevators without the legally required maintenance. The difference in value between two similar apartments can exceed 10%–20% when they belong to buildings with different levels of upkeep, while at the same time the time needed to sell or rent increases. The older a building appears, the greater the divergence in value. Between two identical apartments in the same block, with the same square meters and technical characteristics, the one located in the better-managed building will be sold or rented first, at a higher price and to more reliable tenants.
The building itself, the common areas, organization, and transparency influence the buyer’s or tenant’s decision as much as the apartment does. A poorly maintained building may indicate serious underlying problems such as:
– Poor financial management: This in turn leads to delayed payments, unpaid bills, and lack of liquidity.
– Inadequate maintenance: Faults are repaired slowly or not at all, making everyday living more difficult for residents and— as we will see below — reducing the value of their properties.
– Lack of a maintenance plan: Without a strategy for upgrading common areas, safety, or energy efficiency, the building faces a high risk of losing competitiveness in the real estate market. In a building that is not regularly maintained, the risk of damage and high future expenses increases.