Condo association fees
CatB may be looking at a condo. Anyone buying into a condo association needs to look at fees before making an offer.
Like taxes, condo fees don’t go away. When evaluating condo association fees, know what the fees are paying for. Some condo fees act as a monthly savings plan for things you are going to spend money on anyway. Most homeowner association fees cover water and sewer bills and homeowner’s insurance. If you are looking at a listing sheet with a $150 a month fee, chances are, the fee is covering the basics.
Looking at basic fees:
Up to $120,000: low $125 high $281
$120,000-$240,000: low $40 high $150
$240,000-$360,000 low $50 high $200
When I see fees below $150 a month, I question whether they cover the basics. It may be that the water or insurance bill is additional. As a buyer, you need to check whether you are expected to pay insurance or water in addition to this fee.
Some association fees cover utilities, because they are generated centrally: Heat, hot water, electric, air conditioning. Higher fees may be paying these bills, which may not add to your total monthly costs.
Bigger associations spend money for things that small buildings do not have to pay for. Among those things are trash collection fees, elevator, laundry facilities, and road maintenance.
If you are buying into an association where the condo docs are set up to pay for maintaining the common areas, your condo fee will reflect the cost of these things: professional management, landscaping, and snow removal.
Associations that have luxury features cost every owner, whether they use the features or not: Security, swimming pool, golf course, putting green, tennis court, exercise room, sauna/steam room, clubroom, walking/jogging trails, beach rights, dock/mooring, garden area, valet parking.
Condo fees for recent sales are been as high as this:
Up to $120,000: high $426. The fee included: Heat, Hot Water, Water, Sewer, Master Insurance, Swimming Pool, Exterior Maintenance, Road Maintenance, Landscaping, Snow Removal
$120,000-$240,000: high $1384. The fee included: Heat, Hot Water, Gas, Sewer, Master Insurance, Exterior Maintenance, Road Maintenance, Landscaping, Snow Removal, Refuse Removal
$240,000-$360,000 high $795. The fee included: Heat, Hot Water, Electric, Gas, Water, Sewer, Master Insurance, Security, Swimming Pool, Laundry Facilities, Elevator, Exterior Maintenance, Landscaping, Snow Removal, Playground, Exercise Room, Sauna/Steam, Clubroom, Extra Storage, Air Conditioning
These are calculations often missed by first time homebuyers.
So, going back to CatB’s question. Taxes and condo fees need to be added into the monthly cost, when calculating whether to rent of buy. In high fee associations, renting is likely to be cheaper, in the short term.
