6 ways to tell if you’re paying too much for condo fees.
When you are looking to buy a condo, there are a lot of things to consider before making a decision. For example: is there a parking space included? What kind of amenities are offered in the building? Does the building have a 24x7 security guard? How much will the condo fees be for that particular unit and building?
Condo fees are necessary for all prospective condo owners. We all know why they exist, but don’t necessarily know how to tell if they are reasonable or too high. One of the most common concerns we hear is how to tell if the condo fees for a building are too high.
To help answer this question, we have come up with 6 ways to help determine whether monthly condo maintenance fees are too high.
1. The size of the condo unit you are buying
First, how big is the condo unit you are buying? Even within the same building, different sized units will have a different fee. In Most cases, condo fees are calculated based off of square-footage of the unit. For example, you might ask yourself whether $1,500 per month is a reasonable condo fee? For a 500 square foot unit, it is probably considered high. However, if the unit was 2,000 square feet, it may be a more reasonable.
2. What is included in the condo fee?
Before signing anything, it’s important to look very closely at what is included in the condo fees, as not all buildings are the same. For example, in Ontario, many of the older buildings include all utilities (electricity, water, gas) in the condo fees; however, newer buildings usually exclude electricity and you will get a separate bill for that.
3. What kind of condo amenities are included?
Take a look at the common areas in the building, and what kind of condo amenities or services are provided. If you have amenities such as a pool, gym, 24x7 security, or concierge, your fees will be higher than a building without.
4. The age of the condo building
The age of the condo building will also impact your fees. An older condo building (40 years plus+) will have substantial projects on the horizon, such as replacing elevators, boilers, or redecorating the hallways. A smaller condo, or a walk-up style co-op, will have less to maintain, and therefore less cost.
5. The size and number of units in the condo building
The larger the condo building, the more people there are to split the cost of running the condo. If you have a smaller building with all of the amenities, the per-unit cost will be higher.
6. The financial health of the condo
Before buying, look closely at the condo's financials. It may differ by jurisdiction, but in Ontario condos are required to have a "reserve fund" which is set aside for the future repair and maintenance of the condos common areas. If this is well funded, it bodes well for your future ... if the balance is running low, or underfunded, there may be a big demand for cash in the future.
After examining all of these factors you can get a better sense of whether the particular condo's fees are truly expensive or not. If the price is still too high for you, then you can always choose a condo with fewer amenities or a lower level of service.
Nobody wants to pay condo fees, but the reality is that every building has to cover a certain amount of work, condo maintenance and services such as: janitorial staff, security, property management, and condo management software like ours. The key is to find a building that has a fair fee that won’t break the bank, but will keep the quality of living and maintain the resale value of your unit.