This story is all true. The action takes place in one of the world’s loveliest cities. The cast consists of good, well meaning people. But it also features a sudden death. The conclusion is enough to disturb any property investor.
Vittorio is an architect. Or perhaps I should say that he was an architect. After forty years at the drawing board, designing office blocks and an assortment of the municipal buildings that today contribute to the grace of South Carolina, he has retired. Like many others, he has chosen at this staging post in life’s journey to move home. After a career spent observing the many pitfalls of building projects he is as fussy about his home as a dietician is about the food on his table.
Two years ago Vittorio found his dream home. It is a brand new 3,000 square foot apartment overlooking Charleston harbour in an up and coming neighbourhood. Vittorio’s wife June, a music teacher and a southern lady of great taste and refinement, has installed a grand piano and decorated the rooms with carefully harmonised paintings and other objets d’art.
The apartment is not only immaculate but, in the coinage of estate agents, ‘generously proportioned’. The bath is more like a small swimming pool, and a typical London flat could fit into June’s dressing room. It has a programmable elevator that opens directly into the apartment; a kitchen complete with wine-cooler and all other gadgets yet devised; and a mysterious chute down which all the rubbish conveniently disappears. It is state of the art, and thoroughly desirable.
How a property dream turned very sour
I saw Vittorio yesterday – he also has a flat here in Oxford. He had just come off the phone to his lawyer and was looking bothered. The problem, you see, is that his luxury Charleston apartment is one of twenty in the block. But only seven have sold.
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That means that there are only seven residents who can be charged for the block’s hefty service and maintenance charges. Vittorio is already paying $900 a month, and his contract stipulates that this can only be raised by a maximum of 5% each year. That, I would have thought, is bad enough. But that contract was with the developer of the apartment block, and that development company was owned by a young man called Steve.
Steve also trained as an architect, but went into the property development game. Starting on a small scale, he bought run-down homes in Charleston, smartened them up and sold them. He registered a string of profits as prices rose during the boom years.
But he wanted to do more than this. He wanted to build a property that would show off all the things he had learned at architectural college and all the knowledge that he had picked up since. He wanted to build a property that would be admired, that would make his name and reputation. And, while contributing to the regeneration of Charleston’s waterfront, he saw the chance to make far more money than he had ever done before.
He borrowed all he could get, he drew up the plans, cutting no corners and sparing no expense. These were not going to be any old apartments, but the finest; and he was confident that they would sell themselves.
But they haven’t. All those apparently wealthy buyers happy to shell out a million dollars and more for luxury apartments have suddenly vanished. Thirteen of Steve’s splendid apartments are empty; he cannot repay the money owed to the bank and he is at his wit’s end.
A fortnight ago Steve went for a walk in the wooded flat lands to the south of the city and never came back. His body was found by a dog walker. Steve had shot himself. The bank has now taken control of the apartment block and will sell off those apartments for whatever it can get. That does not bother Vittorio too much. But what does bother him is the thought that his service contract may no longer be valid. He is afraid of a huge hike in his service charges. That is why he has put his lawyer on the case.
Another expensive property mess! More innocent victims. More proof that property investment is fraught with risk.
Give me shares and not property any day.
• This article is taken from Tom Bulford’s free twice-weekly email
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