10 Facts and Myths About Condo Maintenance Fees
When it comes to condos, maintenance fees are a heated topic. No one wants to pay more than they have to for maintenance. We all know someone thinking about purchasing a condo. It is a real estate stepping stone for many young homeowners, they can be excellent investments for those who travel and they are a real estate staple for downsizers.
Through Condos.ca website, I have acquired some accurate stats and facts that will bust some of the myths that exist around condo fees.
The average maintenance fee in Toronto costs $0.59 per square foot.
On average parking will add an additional $43 per month and a locker will add an additional $15 per month to the monthly maintenance fee.
Often when maintenance fees are considered “low” it is usually because the monthly fee excludes heat and hydro.
You don’t necessarily have to trade off low fees for amenities. As an example, Shangri-la has hotel style amenities and the maintenance fee is only $0.56 per square foot. (below the average in Toronto)
It is perceived that older buildings cost more to maintain. In reality these buildings often have higher fees because the suites are larger (fees are priced by square foot)
Newer condo buildings fees increase substantially faster than average in the first 3 years after completion, compared to the overall condo market. Builders are aware buyers want low fees. The estimated cost per square foot is often under what is feasible to properly run a building. As the condo corporation takes over they realise quickly that the monthly fee has to be adjusted according to costs. The steady increase in the first 3 year could be for a variety of reasons such as increase in utility costs. Builders advertise estimated price per square foot 5 years before completion, inflation costs alone add up over a 5 year time span. Also, condo corporations are required to establishing a base for the reserve fund right away.
Everyone gets a little nervous about special assessments. I get it, no one likes a surprise, but they are not necessarily a bad thing. It can be argued that it is better to request a 1 time only lump sum, then to gradually keep increasing monthly fees.
Monthly maintenance fees have a major impact on resale. Toy Factory Lofts, who have reduced their maintenance fees by 30% over the last 4 years, has seen a rate of increased property value that is out pacing similar buildings in the same area.
Heat, hydro, water account for 40-50% of building operating costs. Services, such as cleaners, concierge, general maintenance can account for as much as 25%. Contribution to the reserve fund, management, insurance, etc make up the remaining costs.
A good fiscally responsible condo board can make a difference when it comes to fees. Condo owners need to be invested in their properties, taking an active roll may be beneficial to your fees and upon resale. The provincial government is even considering mandatory education for those managing condo and board members as an add measure to protect condo owners.
Every condo building is different. From services/amenities offered, utilities included, square footage of suites, the inclusion of parking or locker, the fees between different units and buildings can vary significantly. A quick browse of an mls listing on realtor.ca does not provide all the information necessary to understand the monthly fees involved in condo ownership. If you ever have questions about total monthly costs for a specific unit, I would be happy to guide you through what is included, as well as, all the extras.
Click Here to read the full report prepared by condos.ca.