What do 'Condo-Fees' pay for? How does owning a condo compare to owning a house?
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Are Condo Fees a waste?
Some potential buyers point to 'Condo Fees' as a reason NOT to buy one.
Let's take a closer look at what they are, and how condo ownership compares to house ownership.
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Let's Compare Costs
Comparing ownership costs between a house and a condo of similar value.
Let's say $200,000 each, and the condo has a monthly condo fee of $275.00
Water Bill
Water is usually included in the condo fees, but will cost about $60/month for an average house
Savings for Condo owner - $60/mth
Home Insurance
Condo-owners only require condo-insurance, which is much cheaper than normal house insurance.
This is because the condo-building is already insured.
Savings for Condo-Owner - $75/mth
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Home Heating Costs
A $200K home in Winnipeg will be older, and most likely leak heat like there's no tomorrow. Estimate $100/mth for heat.Apartment style condo, on the other hand, will cost approx. $50/mth
A homeowner is well advised to establish a separate savings account for emergency repairs.
Unexpected repairs and maintenance can (and will) come up, especially in an older home.
What kind of things can go wrong?
Furnace Repair $350Clogged sewer line $300Hot Water Tank $1,000orNew Furnace $4,000New Roof $6,000Foundation Repair $15,000
What Could Go Wrong
Let's start small and put aside $50/mth into a separate account.
Part of the 'dreaded' condo-fee is a contribution to a common reserve fund, to pay for future building repairs, renovations and upgrades
Condo Owner saves $50/mth
Let's Add All That Up
Water Bill $60Insurance $75Heating $50Emergency $50Total Savings $235.00
Condo Fee ($275) - Savings ($235)
Cost of Condo Ownership = $40.00
Condos are not for everyone
You may LOVE living in a condo, or you may have great reasons NOT to buy one. Hopefully, I've shown that Condo Fees, by themselves,should not be one of those reasons.