I have received a lot of inquiries lately into certain condos that boast relatively low list prices but turn out NOT to be all that affordable. This inspired me to write a quick note on the other, often missed but very consequential, factors that affect a condo owner’s bottom line. The two main variables are HOA fees (monthly maintenance dues) and property taxes.
It is very common that one will find a $40,000 condo listed and not be aware that it carries with it a $450 monthly maintenance fee. These monthly dues often go toward maintenance of the common areas in the building, a reserve fund, and the utilities (gas, water and heat) of your unit. The reason that these dues can get so out of whack is often due to the mismanagement of the reserve fund and build up of assessments. Say, for instance, 3 years ago the entire roof of a certain condominium needed to be replaced. If that money is not available in the reserve fund, it is automatically passed on to the owners in the building.
Taxes are another important factor, although they are ultimately based on the value of the condo itself, many new construction condos and townhomes are tax abated for up to 15 years. Therefore those condos might be a bit more expensive but could actually be more affordable, when you take everything into account, than some less expensive units with high taxes.
My main point here is that list price isn’t the only factor you need to pay attention to when assessing the affordability of a given condo, not by a long shot. You need to keep your eye on the big picture, the total package, when determining value.
If something looks good to you and seems to be at a good price, give me a call and I would be happy to discuss these other factors with you.