I’ve been reading up on the subject and I think many midwest condos charge about $200/month in fees. Can anyone give a vague idea as to what these fees cover? I know it varies from place to place but is there a general list of things covered? I assume they cover homeowner insurance, commons maintenance, water, sewage, trash pickup and maybe gas. These are all things that a person would have to pay for themselves if they got a home instead of a condo so the ‘real fees’ when compared to home ownership may be closer to $80/month (you’d pay the other $120/month for gas, insurance, water, etc. anyway no matter where you lived). What about property taxes, are these covered in the condo fees or are they seperate? What about maintenance for the condo in particular, is that up to the renter or the condominium association to take care of that?
It was explained to me that in owning a condo, you own what is behind your door. All exterior maintenance, including replacing the roof and windows, is the condo association’s problem. You are correct in stating your fees include grounds maintenance (pool, courts, lawn), gas, water, sewer, trash/recycling. It also includes basic homeowners insurance, but you still want to obtain your own. In my instance the association covered the tax value of my condo ($40K), not the current market value ($90K). Huge difference. It does NOT cover property taxes, but again you are taxed on only what is behind your door, not land value.
Our association stated that for the $180/mo I paid in association fees, $80/mo went into savings for major future renovations and property insurance of the grounds. The rest went for monthly maintenance.
Condo fees generally cover the maintenance of the common areas. So things like utilities for common areas, water, garbage collection, outside paint, caulking, paving, pruning, etc. are covered. If there’s snow fall (could happen in the midwest) that blocks driveways, the condo fees should cover the removal of any obstructing snow. As to insurance, that’s generally restricted to the exterior parts of the condo developoment. You will have to get additional insurance to cover your inside construction and property. Actually, the easiest way to find out what your condo fees cover is to read the condo association rules.
In some condos, you are responsible for paying for you own utilities - gas, electric, water/sewer. This can, of course, make a big difference in the monthly cost, so it pays to find out this kind of stuff well in advance of plunking down your money.
And if you buy a condo, you’re not a “renter.” You’re an owner, and the condo association isn’t some third party - you are a member of the condo association.
Just the thread I was going to start myself! Maybe someone can help me out here…
I work in a small-ish construction firm - we develop residential properties in my city. A couple of days ago, an American came up looking to buy an apartment in out current project. Now, he talks a lot, and some of what he says is pretty hard to believe. This morning, he was in my office describing an apartment he bought in a new luxury building. He painted a rather pretty picture of the place (4500 sq. ft., sea view on three sides, etc.), and then said that the monthly maintenance is close to $5000! Is he lying, or is that a real possibility?
That sounds like an exaggeration, but it’s tough to say. It could be that high, particularly if the place has boat slips and/or seawalls that they’re maintaining, a staff of maintenance workers who keep the grounds manicured, things like that. My bet would be that he’s trying to impress you, and is puffing things up.
I never have shopped for a condo myself, but that fee seems very reasonable. A condo like the one you described is likely in the multi-million dollar range, and comes with all the associated luxuries. Anybody who would pay that much for a condo won’t balk at $5000 monthly maintenance.
Was the $5,000 maintenance unit in a condo or a co-op? Co-op fees usually include real estate taxes and utilities, and run a lot higher than condos. I’ve worked in real estate for 15 years, and the most I’ve seen on a condo is around $1500-$2000.
Well, he never used the word co-op, but I’m guessing it is one. And yeah, he said he bought is for about $1.7 million. So $5000 is plausible, huh? $60,000 a year just on maintenance? Damn, that’s a lot of money by any standards!
$5,000 on a $1.7MM condo seems high to me but there could well be a special assessment. Such as, there is some major structural defect that needs to be corrected so for the next year, instead of the standard $2,000 fee, everyone is assessed an additional $3,000. That still sounds high but I suppose it’s possible.
As far as what is generally covered by condo fees, in my experience the only things that are “generally” covered are master insurance and water & sewer, plus usually an additional sum that is going to the reserve. I think anyone who assumes that a condo fees ALWAYS or almost always or “generally” covers maintenance, landscaping, snow removal, exterior cleaning, or anything else, is taking a big stupid chance. It really depends on how big the complex is, how long it has been in existence, the price of the units, and the location. The only way to tell is to read the condo trust documents, which any seller should be perfectly willing to provide long before the offer stage.
President of the association checking in.
As missbunny says, this should all be disclosed prior to sale. Do not buy a condo if you don’t know what you are paying for. Fees are small in small buildings, bigger in large buildings (duh). In my (eight unit) building, fees average $200 and cover everything except electricity. My friend who lives in a large (530 unit) bilding across the river in Arlington pays $485 a month, which I can almost not believe. That means the association takes in over three million a year. Granted they have three elevators, a pool and on-site maintenance but I’d still like to see the budget that justifies $3 million annual income.
When you get a look at what the fee covers, ask yourself if you’re really going to make use of all that stuff. My friend never uses the pool, party rooms or exercise room so he’s really not getting a good deal on his condo fee. Also, more amenities means more stuff to break, and a better chance that fees will steadily increase from year to year.
It wouldn’t be just maintenance. A luxury building like that would have doormen, parking attendants, building managers, pool lifeguards and the like. They have to be paid. Also, condo boards must maintain a reserve account, where money is put aside to fund the replacement of common elements (roofs, furnaces, pools, decks, etc.) Insurance is another expense. So are utilities for the common areas.
But that’s $60 grand in fees just for that one unit! We don’t know how many units are in the building/complex, but if it is as you described (doormen, parking attendants, building managers, pool lifeguards, etc.) then it’s not a small building.
Even if it’s got only 100 units (which is still too small to justify all of those staff people), that’s $6 million for an annual budget! I guess they fill the pool with caviar and replace the roof every other year.
I just noticed that gouda is in India. Maybe that’s 5000 rupee? That would only be about $US109.
My fees include water, sewer, natural gas, maitenence, snow removal, grounds keeping, and exterior insurance.
I’m required to insure my own property for it’s replacement value, plus $3,000,000 liability insurance in case I screw up and burn down my neighbours place in addition to my own I’m covered.
As other posters have said, make sure you get what’s covered by your fees, in writing before you buy anything. Also, if you’re looking to purchase in an older building, make sure you request the association’s financials before you sign - condo associations are required to have a set about of $$ to do major repairs; however, lots of them don’t. You could buy a place with low fees, be happily paying and then get slapped with a $6,000 bill becasue they need to replace everyone’s balconey and OOPS- they didn’t set aside the funds (this just happened to a friend of mine).
Further, be wary of condo converts - that is, appartment building that are 30 years old and have just been converted over to condos. Buildings that age are going to require a lot more repairs and whatnot than newer properties, and if they’ve just be converted and sold, there won’t be the necessary funds built up yet.
Look up my first post in this thread - I’m not about to ask about maintenance costs for an apartment building in India, especially when I’m in the business of building them buildings!
From the way the guy describes it, it does seem to come will all the trappings Random mentions. The guy says the building has just one apartment per floor, so I doubt they have 100 apartments :). And it’s a brand new structure, so no major repair work is expected in the near future.
After more interactions with the guy, and from reading some of your posts, I’m coming to the conclusion that he’s trying to impress us - god knows what for. Thanks all.