Price for apartment maintenance in Georgia: features and main costs
Maintenance of real estate in Georgia
When you buy real estate in Georgia, you achieve numerous advantages such as the possibility of obtaining a residence permit, reasonably-priced property, mild climate and well-developed infrastructure. Georgia has one of the most loyal real estate legislation. You can make a deal in just a few days, and a foreigner can do this even remotely. All this makes buying an apartment in Georgia an attractive option for many investors. A lot of people purchase real estate in Georgia not only to live, but consider it as a profitable investment.
When calculating the cost of purchasing real estate, people often forget about the apartment maintenance. In Georgia property maintaining costs are not the high, compared to the other countries, but every potential buyer should consider them as well. Before investing in real estate or buying an apartment, it is advisable to calculate all the maintenance expenses beforehand in order not to be disappointed later.
The main expenses of maintaining an apartment in Georgia
The maintenance of real estate implies several main aspects:
- Utility bill payment. Nowadays, any person uses electricity, water supply, gas and other benefits of civilization. This can also include the Internet, which is almost everywhere today. This is one of the main expenses, since it is necessary to pay utility bills even if you purchase a property to earn rental income.
- Real property tax. Many countries have property taxes, and Georgia is no exception. We consider this aspect in greater detail below.
- Municipal fees. In some Georgian cities and regions there are so-called municipal taxes, which are collected by the municipality.
- Service costs. This includes the garbage collection costs, security services for property, entrance cleaning and more.
- Payment for management company services. If the apartment is rented out, then it is necessary to approach a dedicated service to manage your maintenance expenses. Regardless of the location of the owner, the management company deals with tenants and draws up a lease agreement, pays for utilities, and generally takes care of take care of all landlord-tenant interactions. The price for the services of the management company is 10-30% of the rental cost.
- Current repair. In any apartment, light bulbs periodically burn out, mixers break, wallpaper and flooring deteriorate. It is especially relevant for those who rent out an apartment, as tenants are very different, including those who are not very tidy.
If an apartment is purchased in a single-detached building, then the costs of maintaining the adjacent territory are significantly reduced. And, conversely, if we are talking about a modern residential complex with its own parking, security and developed infrastructure, then the costs can greatly increase.
If you do not own an apartment, but a detached house, then you should additionally include the costs of maintaining the site. Gardening, pool cleaning, watering flowers, this is just a glimpse of what you should pay for.
The monthly budget for the maintenance of real estate depends on many factors: the type of real estate, characteristics of the property, infrastructure, adjustment area, location and more.
What is the property tax in Georgia?
Real estate tax is provided in many countries, and Georgia is no exception. However, the amount of tax directly depends on the income of real estate owners, and it does not exceed 1% per year of the property value. Real estate tax is calculated according to the following scheme:
- Income up to 40,000 GEL ($12,000) - 0% per year;
- From 40,000 to 100,000 GEL - 0.05-0.2% per year;
- Over 100,000 GEL - 0.8-1%.
Thus, if the total family income received on the territory of Georgia does not exceed 12 thousand dollars per year, then a property tax is not paid. This is a fairly loyal law, since the amount of tax directly depends on a level of living of the person.
If the property is rented out, the lessor is obliged to deduct tax payments in the amount of 5% of the rental value. We do not recommend renting apartments unofficially, since the country has rather severe fines for such activities, and there are big risks that the very first tenant will complain about you to the tax office.
Is it obligatory to insure real estate?
Real estate insurance is not a mandatory requirement in Georgia. This service is not imposed on anyone, but experts do not recommend neglecting it. It is especially relevant if the apartment is leased out. There are very different tenants, and you may come across inadequate people who can flood, destroy or even set fire to an apartment. If your property is not insured, then no one will compensate you for these losses. Therefore, in order not to appear in awkward situation, it is better to purchase real estate insurance. Its price depends on the value of the object, its characteristics, as well as the list of insured events. Typically, standard insurance costs between $30- $70 per month.
The property and adjoining territory maintenance expenses
Entrance and floor cleaning, garbage removal, parking space, security of the territory, adjacent area cleaning, each apartment owner has to pay for all these services (of course, if all of them are provided). In detached houses, which were built decades ago, you should pay only for garbage removal (about $1 per month per person) and building maintenance (about $10 per month and apartment). However, in large cities such as Kutaisi, Tbilisi, and Batumi, there are a lot of modern residential complexes, including those that contain several multi-storey buildings. Such complexes have a well-developed infrastructure with their own playgrounds, shops, parking and even kindergartens. The larger and more developed a residential complex is, the more you have to pay.
Utility bills payment
We all use utilities, and you have to pay for them. Georgia today is a country with one of the lowest utility rates, and this is a huge benefit for those who are planning to buy real estate here or have already purchased it. Let's consider the main utility expenses.
Telasi is the largest company providing citizens with electricity in Georgia. One kilowatt of electricity costs between 0.12-0.14 GEL. The cost depends primarily on the voltage. Even if the apartment has all the modern equipment (washing machine, vacuum cleaner, air conditioner, and so on), and there are 2-3 people permanently living in it, then you have to pay no more than $8 for electricity per month. If you are constantly at home and use all the conveniences, the bill for electricity won’t exceed this amount of money.
There is no utility company in Georgia that provides citizens with water. However, there are several private companies that deal with water supply. The largest company in the country is GWP. There are two options for paying for water supply services. The first one is 0.2655 GEL for one cubic meter of water. The second option is 3.15 GEL (approximately $1) every month per person living in the apartment. Most people choose the second payment option, as it allows you to use the water without any limitations.
Gas in Georgia is billed based on the meter that shows the total usage. You will have to check the metrics quite often. The cost of 1 cubic meter of gas is 0.39-0.46 GEL.
There is no central heating in Georgia. Nevertheless, huge gas boilers are installed in all new buildings, which heat water and supply it to apartments. A separate boiler is incorporated in each apartment, so you can use it to regulate the supply of heat. A boiler is paired with pipes that branch out throughout the apartment. It is possible to adjust the desired temperature, so the actual building heating cost depends on how much you use it.
Although severe frosts are extremely rare in Georgia, it can be cold in the apartment due to the high level of humidity. Therefore, in winter, heating costs are about $30-40 per apartment. The price largely depends on the square of the housing and what heating temperature is usually set.
In old buildings, which do not incorporate a central boiler, apartment owners install small gas stoves, which are called "karma". With this heater, you can also regulate the room temperature. At the same time, the cost of heating with "karma" is actually $5 lower than when using the so-called central heating in new buildings.
Electric heaters are the most expensive and less sought-after heating option. Heating costs can run up to $60 per month.
Internet and TV
There are several Internet and TV providers in Georgia. You can use Internet without any limitations for $8-10 per month. IPTV costs about $5-8. It is also possible to connect to a landline phone, but less people use it nowadays. You will have to pay up to $2 per month for using a landline phone.
Georgia is a country which can surprise foreigners a lot. And one of those amazing things is the elevator fee. Moreover, payment is not charged in the form of utility bills, but for each trip. Different payment systems are installed in the elevators: in old elevators there is a coin acceptor, and the fare in them costs from 5 to 20 tetri. New buildings incorporate terminals that work with cards. The lift starts moving after the person puts the card to the terminal.
The cost of an unlimited card is $3-5 per month. At the same time, a system has been thought out so that the owner of the apartment does not have to go out every time to see the guests. The cards contain a special code that guests can enter at the terminal and thus take the elevator.
How and when to pay?
Utilities and maintenance expenses of the property and the surrounding area are paid every month. Moreover, you can do it remotely, by transferring money to the account of the management company. If the owners of the apartment don’t use the services of the management company, then they will have to pay utility bills by themselves or write a power of attorney to their representative. This is quite common as many foreigners who own real estate in Georgia live outside the country.
How to save money
The taxes, maintenance costs and management company rates are usually fixed. Of course, there is always an option to join the forces with the owners of other apartment buildings and try to reduce the cost of the services of the management company (in case the services are overpriced). Thus, you can you’re your budget insignificantly.
One of the main ways to save money is to use less electricity and gas. If you use electricity and gas sparingly and do not raise the temperature in the apartment to 25 degrees in winter, then in the cold season you can save up to $ 15per month on utility bills.
Another important aspect is that if you are leaving, and no one will live in the apartment for some time, then you can suspend the services of utilities. First of all, this applies to cleaning fees and garbage disposal. If the apartment does not have water meters and you pay at a fixed rate, then you can also suspend this service. Once you return, you should re-sign the contract with the company. If it comes to gas and light, then all apartments are equipped with meters, so if you do not use the services, you shouldn’t pay for then at all.
One of the ways to save on real estate maintenance is to buy an apartment not in an elite residential complex, but in a detached high-rise building. If the house or complex has poorly developed infrastructure, then the fixed fee will be less. In other words, you have to pay for the quality, and if you wish, you can save several dollars per month.
Let's calculate the approximate apartment maintenance cost of 40 m2 for three people who permanently reside in them:
|Approximate consumption per year
|Price in lari
|Fixed fee - 3.15 GEL per person every month
|2500 kW in average
|Internet and television
|About 120 GEL per month
|14 GEL per month
|Approximately $1 per m2 every month
In total, you should pay 4160 GEL or 1256 dollars per year if you live in luxury residential complexes. If we are talking about detached high-rise buildings or complexes with poorly developed infrastructure, then the prices will be even lower. The size of the apartment, the number of people living in it, the average temperature in winter and many other factors also affect your utility bill.
Do not forget about other expenses such as insurance, repairs and the management company services. It also depends on many aspect.
Five Tips on How to Properly Maintain Real Estate in Georgia
- When buying real estate, try to assess your financial capabilities. It is necessary to clearly understand that you will be able to keep this housing in good condition, and it will not become an unbearable burden for you. Otherwise, it is better to refuse to buy real estate abroad or choose an apartment in a residential complex so as not to pay $50 each month rent only.
- Do not neglect insurance, especially if you are renting an apartment. Reals estate insurance in Georgia is not compulsory, but this additional cost item may one day help you avoid major problems. Standard insurance does not cost a lot of money, typically, 5-10% of the cost of renting a property. In case of a fire, flood, theft or other unpredicted situations, insurance protects you against the financial consequences of financial loss.
- Give preference to those residential complexes that are managed by a dedicated company. Such an organization takes care of building maintenance. If the tap breaks, the lock in the door gets stuck, or another trouble happens, the management company will quickly resolve these issues, and you will not have to look for a specialist on your own. Also, the management company will manage the apartment if you rent it out. If the owner of the apartment lives in another country, then the management company interacts with tenants and solves all organizational issues.
- Try not to accumulate utility bills debts. In Georgia, the prices for both utility bills and the apartment maintenance in general are quite low. However, if you do not constantly pay utility bills and rent, the debts will gradually accumulate, and as a result, you can get an impressive amount. Huge debts are difficult to pay off. If you make all payments on time, this will not greatly affect the family budget.
- Maintain your home in good condition, make timely repairs, replace broken or outdated furniture. Of course, these are rather big costs, but in the future they pay off. Firstly, it is easier to find tenants and charge high rental fee. Secondly, if you want to sell your property, it is much easier to do if the apartment is renovated.