b-LOG: CONDO FEES: The 2 Questions You Should Ask
We often hear from people (the general public and REALTORS® alike) who have concerns with condo fees. By concerns we mean good ol’ fashioned “no thanks!” hesitation.
“I have a friend in a condo and her fees just went up again to nearly $900 a month!”
There are 2 questions you should always ask.
1) What is included in the fee?
2) What amenities am I proportionately responsible for?
What is included in the fee?
CONDO A:An apartment style condo with a fee of $724 per month which includes hydro, basic cable TV, water, underground parking. As well, maintenance of the grounds which have an extensive garden and grounds area, outdoor gazebo with 2 BBQs and patio space. There is also a pool, gym, crafts room, library, social room and guest suite.
CONDO B:This is also an apartment style condo in a rental conversion building with a fee of $468 per month. The fee includes gas, hydro, basic cable TV and water. It has outside parking, a small patio area and minimal green space. Also, there is no gym, library or common amenities aside from a small waiting room in the lobby.
Looking at both on paper with no other background, the condo fee of B is better than A simply because it’s cheaper. Apply that same logic to choosing a Dentist, restaurant or pre-school and let us know how that works for you!
So, back to the 1st question. To get the TRUE value of a condo fee, compare both condos in a side-by-side comparison. Once you see it on paper, you’ll soon have an apples-to-apples view of the true costs.
BONUS QUESTION! An important secondary question is to ask yourself how much these particular amenities mean to you. Will you use the pool and gym 5 times a week? Will a summer day out in the garden area with lunch on the BBQ be on your schedule? Then that fee will carry greater value.
What amenities am I proportionately responsible for?
The rate at which a condo fee will increase will largely be tied to the number of items it is covering. So, if a condo has a large and impressive lobby, underground parking with a car wash, indoor pool with a gym and spa, craft room, billiard room, workshop, guest suite, and library, then you are going to be responsible for your share of that space.
Simply put, if you are 1 of 80 suites and the costs to operate all of these amenities is “x” per year then your fee will include your proportionate share of that number. Costs can include heating and cooling, lighting, insurance, maintenance, management, elevators, water, shared utilities, major mechanicals, reserve fund contribution and more depending on the property.
So, based on that, the condo fee is at the mercy of any associated increases (utility, insurance, management or otherwise) with those features or costs.
Oh…one more thing. Square footage plays a huge role in this too.
If you are looking at a condo apartment building that has larger square footage, that means there are less suites to pay for those shared costs. So, that same building but with 55 suites instead of 80 means the condos are going to be nice and large (maybe 1,500 – 2,500 sq.ft.) but the fee will rise due to less people contributing.
Think of going out for dinner with 10 friends. When the bill arrives, 4 of your lovely friends have vanished and suddenly 6 are splitting the cost! Same delicious meal, just less people footing the bill.
The same concept applies when comparing a condo apartment to a condo townhome. While the fees in a townhome should be lower (less shared costs ie: no elevator or lobby), you should still make sure you are getting a real apples-to-apples comparison.
Hopefully this helps shed some light on the true value of a condo fee. The main thing to remember is you really need to peel back several layers of that onion before writing it off as ridiculous or too high.
Need help? We have dealt with condos across Niagara for many years so feel free to reach out to us anytime.
…and big thanks to Dietmar Becker from unsplash for the awesome photo!
Thank-you for visiting.