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Home vs. Condo - Are condo fees worth it?

Posted by Mike Parsons
August 17, 2006 at 06:49 PM

Many buyers struggle with whether they should buy a condominium or a single family home. A common objection for condos is thinking that a condo fee is throwing money away. One must first understand what a condo fee covers. Often, a condo owner will not have to pay for water or sewer costs, this is paid by the condo association.

Also, the condominium association will carry a homeowners insurance policy on the exterior and/or structure of the condomnium building. The condo owner will only be responsible for insurance on the interior of the unit and personal property. This will save the condo owner approx. 50% of the cost of the typical homeowners insurance policy for a home.

Typically a condomimium association will cover:
1. Maintenance, paving, and plowing of the driveway, sidewalks, and curbs.
2. Roof replacement and repair.
3. Exterior siding/gutters maintence or repair
4. Landscaping / mowing / trimming

An example would be a $150,000 condo with a $140 monthly condo fee for a first time buyer.
While owning a home you might average a water/sewer bill of $25 per month and save $20 per month on homeowners insurance costs compared to a house. Thats $45 saved per month. When you think about the actual costs of maintaining the exterior of a home, landscaping, paving, fertilizer, purchasing a lawnmower, weedwacker, hedge trimmer, etc... Most homeowners would spend more than $95 a month on average. This isn't even taking into account eventual big ticket items like roof($5000) and siding ($5000) replacement. There is also quite a value to living a low maintenance, care-free lifestyle. So in my opinion, the notion that a condo fee isn't worth it is false.

Comments

Does anyone have an idea where to find online a list of what is supposed to be in Condo Fees? They all seem to differ, so I'd like to have a an example.

Miep Visser
Miep.Visser@hotmail.com

Posted by: Miep Visser | December 5, 2006 05:47 PM

Thanks for your question. Unfortunately I don't know of any resource online or otherwise that discloses what condo fees cover.

Most things that are covered tend to be about the same from condo to condo, except water. Most condo fees will cover the exterior condo insurance, roof, siding, gutters, trash removal, maintaining streets(paving/plowing), elec. for the common areas(street lights/club house/pool), landscaping maintenance, and often your water bill is paid for by the assoc, sometimes not depending on if the condos are seperately metered.

Items not covered by the association include:Interior of the condo, insurance for the interior of the unit and contents, utilities except water, windows.
Please note with alot of condo conversion of duplexes and 4plexes in the Downtown areas, ome of the units are fee-simple. This is a condo status but usually the homeowner is responsible for maintaining his or her unit(interior and exterior).

Moral of the story is it is typically a case by case basis. To know for sure you should have your agent acquire the condo bylaws for the property in question which should explain the assoc. and owners responsibilities. If you have any additional questions please let us know.

I hope this was helpful! Mike

Posted by: Mike Parsons | January 23, 2007 07:00 AM