Posted 12.18.13 @ 8:20
We’ve all heard that saying “there’s no such thing as a free lunch” – and all those lovely perks and benefits that come with a condo are no exception. As condos move to attract wealthy homebuyers like you that expect the best of the best, it’s no surprise that operating costs are increasing… and so are their building and HOA fees. Is the ease, comfort and slight affordability of condos a mirage, or is there more than meets the eye?
Property Managers Have to Cover Costs
In 2012, just one condo unit cost about $2,200 to maintain for a full year – up by about 3% compared with 2011. It’s expected that 2014 will bring another 3% jump, or more depending on whether the condo leases its land or owns it outright.
But what costs do they have beyond the concierge? If you go with a barebones service package, will you actually see much in terms of savings? Probably not.
Over the last decade, condo fees (known as common charges or HOA fees) have risen 25%+ - that’s an average of a little over 2% a year. This is why it’s important to be part of your HOA, since they set the budget, which sets the fee, for the building.
Fees Have Risen 25% in the Last Decade
Fees will always vary depending on amenities, how many and how large the building’s units are, and of course, the building’s age. Newer condo buildings, much like newer homes, can end up being more affordable because they don’t require as much maintenance as an older building.
If your building has 400 units, that’s 400 people the fees get spread across it – but if your building is smaller or more exclusive, that’s a smaller spread for everything to get worked out across.
The average building, including all of the taxes, in a major metropolitan area like BC or Toronto will charge around $1.60 to $2.00 a square foot. But these aren’t the only fees building managers have to worry about – everything from land leases, replacement reserves and other things can suck the budget dry too.
Land Leases Chew Through Budgets, Too
If your building doesn’t actually own the land it’s sitting on, but instead leases it, it can cost them as much as $2,500 to $3,000 (or more!) per unit.
And then we have to look at what’s behind the curtain, it comes back around again to amenities. A fully staffed lobby with concierge and security cost money. If you want common recreational spaces, swimming pools, full service parking and even a bar on premises (many of the new condos have them planned, especially to attract hyper-social Baby Boomers), all of that adds on to how much you’re paying in fees every month.
So is a condo right for you? It depends! We can’t tell you now, but we can help you look at all your options and find the one that’s right for you. Give us a call today and see what the Goodale Miller Team can do for you.
You can also check out our great selection of luxury condos for sale in the Oakville area here: http://www.goodalemillerteam.com/Feature/Lifestyles/Condominiums/9