There's generally a negative stigma that surrounds condo fees. The majority of people I speak to think they are a waste of money and prefer the cheap ones to the more expensive. Yes, some condo complexes are poorly run and the money collected from fees can be wasted or spent incorrectly. However, a well-managed condominium will use the fees to maintain the value of a property and in some cases, increase it as well.
You'll rightfully be wondering where the money goes. Before you purchase any condo, you’ll be given the opportunity to review the condominium documents which will also outline the budget for the complex. Keep in mind the reason for buying a condo is they can offer a low maintenance, worry free lifestyle. After reviewing a budget you’ll learn that fees pay for landscaping, garbage collection, snow removal, exterior property insurance, water/sewer and maintenance of any common areas like hallways, lobbies and rec rooms. In apartments, your heat bill will be included as well. Having the exterior insurance covered in the fees also means you’ll only have to insure your personal items in the unit which is often very inexpensive.
On top of this, a portion of the monthly fees will go towards a reserve fund. This will be used for any long term maintenance projects like replacing a roof or windows. A healthy reserve fund that plans for the future will protect your investment. If you own a house, you’d have to put money aside to eventually renovate the exterior yourself and with a condo it’s no different. In townhouses, a condo corporation will also ensure that when you need to renovate your exterior, your neighbours will have to as well. This maintains the look and feel of your complex and makes it an attractive property to buy.
Owning a condo is a lifestyle choice and when you decide that maintenance free is the way you want to go, you’ll have to realize there is a cost associated with it. Don’t buy a condo just because the fees are low. Do your research, review the budget and better yet, join the board. By being a part of the board, you’ll have direct influence on how the money is spent. Condo corporations are formed to protect the owner’s investment and like most things in life, you get what you pay for.
Chris Perkins, Real Estate Consultant
HaliPad Real Estate Group