abk

I am starting this thread as one of my relative who owns an apartment in a very old complex consisting of 70 flats.the problem is that the superstructure is no longer deemed to be safe for human habitation,many of the owners are desirous of either selling the whole complex(land value) or build a new one.

the problem is that about 25 owners are not end users/have alternate homes/or investors/do not have the means etc and do not want or care about either disposing nor rebuilding.

so even though many are willng they are not able to come to a conclusion and my poor relative has no other property and wants to rebuild this one or dispose this and buy another.

this prompted me to conclude that it is better to buy flats in smaller buildings with say less than 12-24 homes or the UDS is demarcated block wise(which is not possible in high rise.
i understand that this could happen in smaller communities too but the probability of convincing few would be easier than say a community of 100 plus owners.

your investment is totally blocked and virtually you are owning a worthless asset.

pls post your opinions.concentrate on the investment perspective and desist from posting advantages of big community living.

wiseman

Abk,

I am facing a similar situation in a residential complex which will be 25 years old now (though very well maintained). I suspect, eventually builders will see this side of the business as a mine (don't know why they have not yet). Here is why ...

Most of these old complexes are by now in the heart of cities and worth a huge amount which is many times what they was bought/built at. Simultaneously, most are built in the old style with lot of space used for garden, parking, etc.

If we follow the trend of developed countries inner cities (check out Manhattan in 1890s and today using Google; I'm also attaching photo of little Italy, NY in 1900, check it out), for each flat in these locations we could build maybe 2 flats utilizing space much more efficiently (or even more if allowed to go up as most of these are 5 - 8 storeys high and we can now go much further up).

It is not inconceivable for builders to arrange for families living here to be moved en mass to another location for 1-2 years with shared cost, demolish and rebuild and everyone wins. When people see the large jump in "wealth" thats also released as the second and third flat could be sold off, they will see light of day.

Owner sees unlocking of wealth where his 1 flat of 1 crore becomes 2 or 3 flats of 1 crore each (new flats seeing greater value compared to old). Builder gets a healthy margin for his troubles. And city releases more flats in inner areas, launching more capacity and keeping prices in check.

Is this too idealistic? When all the flats being built today become old, what else is the option?

I'm sure a number of laws and bye-laws need to be changed to make this happen, but when pressure goes up these will automatically happen.

This argument interestingly contradicts the accepted logic that land only appreciates and flats only depreciate. When flats are recycled, flats can be made to re-appreciate as well. This is nothing but another way of saying that the commonly owned land underneath is made to appreciate in another way. So, buying flats instead of land may not be such a bad idea after all (at least the risk of buying land in vague areas and seeing litigation is minimised when flats are bought)!!!

cheers

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abk

wiseman what you say sounds good but the fallout of some people not concurring blocks the needs of a lot of people.
if all agree nothing like it many old buildings in mumbai are being built in this manner.
but the crux of the argument is the problem of unanimity

zapper

A friend of mine stays in a complex in Annanagar(10 flats and 20 yrs old).The owners can't even agree on the colour of the paint for renovating the building.

One guy says why renovate when he is getting sufficient rent as it is.Another guy says he does not want to share the cost of the renovation as he cannot afford it.Getting 10 guys to agree on anything is going to take all the diplomatic and manouvering skills of Henry Kissinger himself !!