Besides making monthly mortgage payments, condo owners must pay condo fees as well. This amount covers maintenance costs for common areas in the condo building and it contributes to a rainy day fund. Sounds fair enough, right?
Problem is, there’s no benchmark to how much condo fees should cost. In some places, it’s $50 while others charge up to $1, 000 per unit per month. It all depends on the size of the unit, and a few other factors.
If you feel you’re paying way too much in monthly condo fees, you’re not alone. Condo fees are rising steadily, especially in older buildings that are due for major maintenance. Luckily, there are ways to reduce condo maintenance fees and we will share some of them with you.
The average cost of condo fees
With condo fees, it’s all about location and proximity to certain areas like the beach or the city. That’s why you’ll find that condo fees can differ within the same state or province. Below is the average cost of monthly maintenance fees in some of the major North American cities:
- New York – $ 1,344
- Los Angeles – $600
- Chicago – $400
- Houston – $416
- Philadelphia – $450
- Toronto – $ 520
- Vancouver – $480
- Calgary – $416
As you can see, there’s a vast difference in the amount of condo maintenance fees you have to pay in New York compared to Chicago. Whether these fees will remain stable is another matter.
How are monthly condo fees calculated?
If you live in a planned condo development, chances are there’s a condominium association. This organization is led by a board of directors and it’s responsible for taking care of maintenance and other issues that affect the condo community. As a condo owner, you too are a member of this association and it’s your job to hold the board accountable for the condo fees you pay each month.
Typically, monthly condo maintenance fees cover the following basic expenses and amenities:
- Patios and sidewalks
- Common areas
- Swimming pools
- Tennis courts
- Sewage lines
- Trash collection
- Snow removal
- Physical exterior repairs and maintenance (e.g. painting the walls)
The condo association must also factor in the daily expenses of running a condo community, including:
- Contracts (elevator maintenance, garbage pickups, snow removal, landscaping, security, concierge, property management, etc.)
- On-site staff payroll
- Housekeeping and maintenance
- Property taxes
- Insurance (condo insurance cover and premiums)
- General admin costs (i.e. office expenses, legal fees, audit fees, consulting fees, etc.)
Additional amenities such as a clubhouse, concierge service, and covered parking can significantly increase your monthly condo fees. Depending on your condo association, these extra amenities might be optional. Offering extra services as non-compulsory is a great way to reduce condo fees because condo owners can pay more or less based on the number of amenities they have access to.
The great thing about condo fees is that they’re meant to save the homeowner money. Because you pay monthly fees, you don’t even have to think about repairs and maintenance issues. It’s all taken care of for you, but for a fee.
How do monthly condo fees affect the value of your property?
The maintenance fees you pay each month have an indirect effect on the value of your condo. For instance, a condo building with higher monthly fees will attract high-end buyers and investors. However, it might take a while to sell off the units in such a building because of high fees that chase away buyers.
This is an important consideration to make if you’re buying the property as an investment.
Low maintenance fees aren’t always good in the long run either, because they lead to special assessments. They also point to poor or mediocre maintenance and planning.
How to reduce condo maintenance costs
There’s a lot that condo associations can do to cut down on some of these expenses. Here are a few viable solutions that you can suggest to your condo association:
1. Digital solutions
Property management software like Condo Control is a perfect example of a money-saving digital solution for condo associations. Condo associations can use this software to:
- Send documents to residents electronically
- Make online payments
- Get quorum easier with proxy/e-voting
- Track maintenance and service request
- Make community announcements
- Safely store important documents
- Reserve building amenities
- Manage parking and security
- And much more.
Using this software will help to cut back on things like general admin costs, maintenance supervision, papers, and on-site staff payroll. The condo association can then pass on these savings to unit owners in the form of reduced monthly maintenance fees.
2. Energy efficiency
The efficient management of energy resources is the easiest and fastest way to reduce monthly fees. That’s because utilities contribute a great deal to monthly maintenance fees.
That’s why a growing number of condo associations are adopting alternative energy methods that are cheaper and more efficient. This includes the use of LED lights instead of incandescent bulbs. Not only are LED lights less demanding on the overall energy supply, but they can last for up to 20 years, thus saving on replacement costs.
Replacing old boiler systems can also help to reduce condo fees as modern boilers are 20% more efficient than older models.
3. Only pay for what’s necessary
A lot of condo associations charge exorbitant monthly fees because they take on costs that are actually the owner’s responsibility. That’s why it’s important to look at the community declaration document to make sure you’re not paying extra for something that would cost less if you were paying for it individually.
4. Bulk purchases
We all know that buying in bulk translates to massive savings, right? So, it’s a wonder why most condo associations haven’t woken up to this truth. For instance, buying insurance cover in bulk can get you preferential rates that you wouldn’t receive when you buy it per individual unit.
The same goes for light bulbs, heating systems and everything else that’s related to condo maintenance. With careful planning and efficient shopping, a condo association can save a significant amount of money in condo maintenance costs.
It doesn’t matter if you’re a property investor or a homeowner, buying a property is a big deal. At the end of the day, you must consider what’s right for you based on your budget and needs.
If you’re looking to purchase property, think carefully before you make your choice. Ask your real estate agent as many questions as possible to make sure that this is the right move for you. After all, you don’t want to end up paying for amenities and services that you’re not using.
Also, the building you live in should reflect your values. For instance, if you consider yourself a homebody then you might not need a building with a golf simulator and an indoor pool. Save yourself the trouble and stick with a no-frills community that comes with the basic amenities you need and want.
On the other hand, someone who’s a social butterfly will thrive in a condo community that has all the bells and whistles.
The most important thing is there’s a home out there for everyone and you’ll never pay too much if you shop around to find a building that’s perfect for you.
The Bottom Line
As you can see, you don’t have to settle for exorbitant condo fees. There are a lot of measures that a condo board can take to lower monthly fees for unit owners.
Keep in mind that condo fees aren’t fixed, and they can increase in the near future. But, if proper maintenance and access to amenities are important to you, then maintenance fees shouldn’t be a barrier. Just apply the tips provided in this article to help lower your fees while enjoying the convenience of a condo community living.