What Are Condo Fees, and Do I Have to Pay Them?
Whether you’re looking to make the leap to condo living, or you’re simply adding a property to pad your investments, purchasing and owning a condo is a slightly different ball game than owning a house. As most people are aware, condos come attached with monthly fees on top of the mortgage payment. So, the million-dollar question remains: What exactly are condo fees, and do I actually need to pay them?
What do condo fees cover?
From collecting garbage to fixing heating and cooling systems to shovelling the snow, condo fees cover the cost of all the utilities and maintenance fees required to successfully run your building. On top of these weekly or monthly chores, the condo fees also cover larger building repairs or renovations by way of a reserve fund, which saves a percentage of your monthly fees in a pool kept for pricey, unexpected issues.
Another thing to consider is that condo fees are also dependent on the value of your specific space. So, for instance, if you go with the penthouse suite—a great choice—you will incur the highest percentage of fees. Which is fine, because you also have the most to gain from your investment in the long run. If you feel you want something on the larger end, but you don’t care too much for views or location, you can opt for a less prime area and, in return, be gifted a lower cost for condo fees.
Do I have to pay for them?
The quickest answer to this question is yes. You must always pay for condo fees. When you invest in a condo instead of a home, you are joining a community and a shared environment. Therefore, you are every bit as responsible for sharing in the maintenance and operation of the building as everyone else. And, because of this, it’s a wonderful idea to go through a trusted real estate agent who can ensure that all fees are accounted for in your initial buying budget. This way, when you find that perfect condo you want to move into immediately, you aren’t met with an onslaught of unexpected payments.
Condo fees protect your investment
Many people think of condo fees as a burden, but in fact they are an investment in the value of your property. A great condo association will ensure that fees cover not only the daily tasks of living, but also consistent and proper upkeep of the entire building. This will not only maintain the value of your condo, but of the building as a whole. And it will also attract the best future buyers.
In some cases, they can even regulate how people renovate their spaces, ensuring that everyone keeps a visually appealing unit that can positively affect the overall appearance of the building. All of these elements drive the value of your condo up, ensuring that your investment stays valuable.
How much are condo fees in the GTA?
As of February 2019, Oakville had the highest resale value of condos in the GTA, coupled with the highest number of active and new listings. In the GTA area, condo fees cost between $0.50 to $1.00 per square foot, with Toronto being the highest at an average of $0.64. Oakville’s range fluctuates around this rate as well, which isn’t surprising given the many things it has to offer—a quieter way of life, spectacular views, and all the amenities you could need.
Hamilton is another up-and-coming area which is seeing spikes in the cost of living due to increasing outside interest in local real estate. The range here is a bit broader as it’s a city that’s in transition in many ways. However, it’s also highly established with many green spaces. It also hosts numerous cultural events and offers great entertainment.
In order to assess what your condo fees might be in the area of your choice, you need to consider a few key factors: age of the building, amenities, building size and, in some cases, status. This will give you a rough idea of the condo cost plus the added fees—on top of what your rate of return might be when you go to sell.
Condos offer easy living, and condo fees are just part of the process
Today, people are looking to downsize for retirement, easy living, or just to save money due to rising costs in the area. They offer so many wonderful things that a house doesn’t, including a great community, possibly a gym and party area within the building, and the hiring of property caretakers that remove the burden of upkeep. The resale value is high, increasing the value of the investment, and seeing as we live in a fast-paced, expensive world, making strong investments just makes life that much sweeter.
So, if you’re considering purchasing a condo, don’t shy away because of condo fees. Condo fees are a necessary part of ensuring your quality of life goes up, along with your hard-earned investment. The key is to always do your research. Know the location, check the state of the building, and hire someone to help you through the process.
Alex Irish & Associates are a globally renowned, local agency that knows the Golden Horseshoe inside and out. Call today and they’ll get you on the path to greener pastures, in finances and in life!