When it comes to buying a new home, you may have thought about purchasing a condo. Condos offer a lot of versatility when it comes to home ownership that you otherwise would not get in a single family home. For part 1, we will be discussing the possible fees required for condo ownership.
Condo home living is greatly complimented by exterior maintenance being taken care of by your homeowners association, and extra amenities like tennis courts, common areas, and workout gyms. However, before you dive in and get pre-approved for a condo, there are a few things you should know!
- 1 Minute | No Hard Credit Check
Condos Have Homeowners Association Fees
Condos have a homeowners association, which is a group of people that represent the owners and interests of a condo complex. Each condo unit owner in the complex has to pay a specific homeowners association fee to help cover the expenses with maintaining the complex. It’s very important that if you are looking to purchase a condo, you know exactly how much the homeowner’s association fee is.
The homeowners association fee ultimately goes towards services that make life much easier as a condo owner. If you are in the Northern states that experiences snow, your homeowners association fee goes towards paying the grounds crew to shovel for you. And additionally, once all that snow melts, your homeowners fee also goes towards lawn and greenery maintenance.
Homeowners Association Fees Can Change From Year to Year
Unfortunately, if the homeowner’s association decides they want to raise the fee required from each condo unit owner, they can. And this can be the difference between paying $200 extra a month on top of your mortgage payments, or paying $800 or more a month. Homeowners association fees can vary between complexes, so it’s imperative that you do proper research before purchasing!
On top of this, this homeowners association fee can easily offset the lesser initial cost of condo ownership versus buying a single family home and maintaining it yourself. The homeowners association fees is an expense that you may never see a return investment on and can closely be related to rental fees for apartments.
- 1 Minute | No Hard Credit Check
Condo Owners May Have Special Assessment Fees to Pay
Special Assessment fees are additional fees on top of the homeowner’s association fees that are paid by condo owners to perform sudden, large repairs or for projects in the condo complex. These fees are usually required by the condo owners in the complex if a sudden need for repairs costs more than what is available in the condo budget or reserve funds. That’s right: if the budget cannot cover the costs of repair, the condo owners will be required to pitch in.
For example, if the roof of one of the owner occupied condo units becomes damaged due to a storm, a special assessment fee may be collected to rush the repair of that roof. What this means for you is that you can suddenly have to pay an additional amount of money that month that you did not budget to spend.
This amount can vary from $50 to over thousands of dollars per month. And while you’d have to spend this kind of money if you were in a single family home and an expensive item suddenly needed repair, it is important to understand that in condo units you have less control on when you’d be able to pay for that repair.
