When buying a condo, whether it’s to live in yourself, to rent out or as an investment that you intend to flip, one significant factor to consider is the condo fees you’re committing to. These fees are not something that will be able to be negotiated or changed once you own a unit so you want to be sure that you are ok with them before you buy. As you hear the range of condo fees that exist in the market today, there’s no doubt that you’ll be questioning whether the fees are actually worth the expense.
“Are condo fees worth it?” is the wrong question. The right one is, “What value do the condo fees provide me?”
To answer that, as in any case of assessing value, is figuring out what you GET for the condo fees being paid.
What do condo fees cover?
Generally speaking, condo fees will cover almost all expenses around the outside of your actual unit. From new lightbulbs to cutting the grass, condo fees take care of all of the things that the property needs in order to maintain a comfortable living space. Though the exact items that are covered may vary, some of the most common inclusions are:
- Lawn mowing
- Snow removal
- Hedge trimming
- Lightbulb replacement
- Elevator maintenance
- Roof maintenance
- Window repair and replacement
- Common area cleaning
- Pool maintenance
- Amenities like a concierge, security, gyms and on-site office spaces
- Laundry room maintenance
- Utilities like sewer, water and trash removal
Condo fees can be a good thing
Although the idea of a required bill each month may have you second guessing your investment, there are actually many positives to this expense. If you owned a single-family home, you would be responsible for all maintenance and upkeep including law care, roof repair, furnace replacement and window upgrades, which can all be quite a costly expense, especially if you don’t plan ahead for them. By paying into condo fees, you are essentially budgeting for many of these larger repairs, making them a more manageable expense.
Condo fees from a investor/landlord’s perspective
When investing in a condo was a rental unit, condo fees can actually be a very positive thing. When determining what to charge for rent, the condo fees can be included in the rate sincee they are a consistent expense. Condo fees can dramatically decrease the amount of work required by a landlord so this cost of doing business comes with some payoff. Rather than being on call to handle everything from lawncare to window replacement, you are able to rely on the condo board to take care of anything that’s needed.
The value of condo fees
The value a homeowner will get from paying condo fees is going to vary from one situation to the next. There are a few factors to take into consideration before making a decision one way or the other.
The value you’ll get from it
If you’ll make use of most or all of the amenities that the condo fees cover, you will likely feel a significant return on the expense. However, if you aren’t one to use community spaces like a pool, gym, elevator or parking space you may find that the expense is more than the return.
Your lifestyle
If you love the ability to use a pool, on-site office space, community gardens and BBQ spaces and other amenities that come with your building, condo fees can be a great trade off.
Whether the fees will benefit you
Many condo fees will reduce the time commitment and workload that you’d otherwise have if you were caring for a single-family or duplex home. Tasks like mowing the lawn and shovelling snow can require quite a bit of effort and if paying a condo fee can help reduce the requirement, it may be worthwhile, especially if you are a landlord and not living on site.
A reduction in initial investment
When buying a condo, the purchase price is typically much lower than that of a single-family home. When factoring in these savings it can give you room to justify the addition of condo fees to your monthly bills. Additionally, if the condo fees cover expenses like utilities and the cost is fair, you may find yourself able to save more money each month which can benefit both your savings account and your mortgage payments.
Condo fees may be worth it to you!
At the end of the day, it comes down to whether you’ll find value in the things that they include. If you live a busy life or are a landlord and won’t have time to take care of your exterior property, a condo unit with fees that cover some of these maintenance tasks might be exactly what you’re looking for.
