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How much should be in a sinking fund?

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  • AlexMac
    AlexMac Posts: 3,064 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Wow again! £3.5k pa? If you mean that's the charge per individual flat, no wonder you've taken over the management; presumably the previous agent could afford lots of Caribbean trips on that income!

    More seriously, I've never paid more than £1,3k p.a. for a 2-bed flat; and that covered not only insurances, routine maintenance and communal lighting, but also a significant element for the landscaping, upkeep and staffing of the private estate (e.g closing the gates and only admitted residents in the rush-hour to prevent commuter parking and rat-running). And a sizeable surplus each year towards cyclical maintenance of a listed, early 19th Century mansion block.

    My current little 1-bedder only charges £420 p.a to each of 6 converted flats; and out of that we have saved enough to recently decorate and re-roof the converted Victorian pile, which is also Listed...

    Managing Agents' Admin fees; doncha luvvem!
  • 3mph
    3mph Posts: 247 Forumite
    edited 26 February 2017 at 10:02AM
    AlexMac - haven't bought yet, trying to, just quoted from lease. Yes expensive but 2 bed flats are over £500K each

    EDIT - half goes on "Admin & Fees" ie Chartered Surveyor who provides actual Management. Complete rip off but majority of owners are very wealthy (I am definitely not) so as far as I can tell don't care.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    AlexMac wrote: »
    This seems fair, as you'd feel sore if someone owned a flat for, say, five or six cost-free years, then they sold it to you and you copped a big bill for a new roof a year later?

    But presumably my price would have reflected the fact that the roof was knackered? Or alternatively, I'd feel sore as a seller if I had being paying for refurbishment work which still hadn't been carried out by the time I sold.

    The norm in Scotland is not to have a sinking fund (other than a modest "float" for day to day expenses), you just hope that everybody has their own rainy day account for when a large bill comes up.
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