While working with clients to find real estate I am often asked questions about condominium fees. There seem to be a little bit of pessimism probably due to a lack of knowledge about condos.
Let me address the first question, what are condo fees?
A condominium owner owns an equal share of the common elements ie. The building facade, windows, landscaping, amenities etc… The unit owner also has an equal responsibility to pay for the “maintenance” of these elements. The condo fee is simply the dollar amount that has been calculated by the condo management and billed to the unit owner every month.
How much are condo fees?
In Mississauga where I predominantly sell real estate, the condo fees are all over the place. There is a good reason for this too. It depends on many factors including how well maintained the building is; the size of the unit; the floor the unit is on etc. In general, I try to see the value that comes with the condo fee in comparison to like condos. For instance, if condo “A” is 3 bedrooms on the 22nd floor, has an area of 1600 sq. ft., has 24 hr. security, hydro, heat and water are also all included vs. condo “B” is 3 bedrooms on the 1st floor, has an area of 1100 sq. ft., has no security and no utilities are covered by the condo fee. Then I would expect unit “A” to have a much higher condo fee vs. unit “B”. If this is not the case then unit “B” would be considered to have an expensive condo fee in comparison. To generally answer the original question I would estimate for a 1 bedroom unit the condo fee would be between $400-$500 on average, 2 bedrooms unit would be around $500-$600 on average and 3 bedroom unit will be in the neighbourhood of $600-$700 on average as of summer 2012.
What utilities do the condo fees cover?
In the past many condos had all inclusive condo fees where the unit holder did not have to worry about paying anything extra. In the past 5 years the government has given the condos incentives to go with metered hydro billing in a quest to reduce the demand for hydro. As a result many condo fees will only cover heat and water these days. Hydro is usually billed separately. This may not be such a bad thing however. The unit holder can now control their hydro costs directly often leading to a savings. For others who still use hydro unwisely, have probably seen their cost go up.
Why would I buy a condo when the fees to live there are so expensive?
This question is ultimately one of personal life style choice. Consider how much it would cost to own a freehold home but adding all of these amenities: Having a 30000 sq ft recreation centre with state of the art equipment, personal trainers, yoga classes, indoor and outdoor swimming pools, party room with kitchen, movie theatre, bowling alley, putting greens, virtual golf, lounge, barbecue area with plasma TV’s, courts for basketball, tennis, squash and landscaped terraces. All of these amenities have a maintenance cost that is covered by the condo fee. In addition the fee also covers cost to maintain the building, pay for security guards, removal of snow, landscaping, having an onsite superintendent, some funds are put a side for major repairs or renovations, insurance, paying for the management company to oversee the general operations and even the heat, water and hydro used by everyone in the common areas.
If you prefer not to have all of those benefits in favor of doing it yourself that’s perfectly fine. You will probably save lots of money. For those who see the value in not having to cut and water the grass and living in a state of the art building with a modern recreational facility will save time from going to the local fitness club. The management company looks after the up keep of the building and puts away money for a rainy day, whereas most individuals are not that prudent.
Where some people see expense I can see value. As always the choice is yours. When shopping for a property it is very important to work with a knowledgeable real estate professional who knows the area. Every ones situation is different and my stated points of view are for general knowledge.
See a comparison of all fee's for Mississauga condos.
Thank you for reading my blog and as always please contact me at firstname.lastname@example.org if you have any questions.
By Todd Lee