Whether you are thinking of buying an apartment or condominium as an investment property or as your primary residence, you are going to have to pay more than just your monthly mortgage and living expenses. Unique to the apartment/condo market are the monthly maintenance fees. These fees can range in price and make owning a condo a real burden.
Consider this: your monthly maintenance fee can be as cheap as $50 a month or as much as $1,000 a month. It all depends on the size of the apartment and the location. With location being everything, buy in a sought-after neighborhood, and you’ll be paying more in maintenance fees than if you purchased a condo in a less trendy area.
Monthly maintenance fees can impact more than just your bank account; they can change the property value. That’s because an apartment or condo with low maintenance fees is going to sell quicker than one with high monthly maintenance. What’s more, the ones with low monthly charges can often sell for more than the units that command high fees each month. After all, cash-strapped real estate buyers/investors aren’t going to be excited about paying $1,000 a month in maintenance fees on top of their mortgage.
When it comes to monthly maintenance fees, investors can’t only think about it in terms of the cost. They must also consider the services apartment and condo owners receive. Many building operators charge monthly maintenance fees to cover the cost of maintaining the lawn and outdoor grounds, electricity, water, and other services in common areas, as well as to maintain a swimming pool, tennis courts, gym or other amenities. The monthly maintenance fee can also be used for trash collection and exterior maintenance of each apartment or condo unit. The quarterly or annual assessment typically covers those unexpected or major expenses that don’t fall under the monthly maintenance fee category.
Outside of the general upkeep, there are a ton of other reasons a condo or apartment operator would charge different monthly maintenance fees. For instance, you may be buying into a complex that has a concierge service, increased security or covered parking—all of which are going to increase the amount you pay each month. Depending on the building operator, some of those extras can be optional, which means you may be able to lower the monthly expense by foregoing some amenities.
One of the knocks against owning an apartment or condo is that while you pay this monthly maintenance fee, you are on your own if something goes wrong inside your unit. Let’s say your tile floor starts coming apart. Renters will get that fixed free of charge in most cases; however, owners of apartments and condos will have to foot the bill for repairs as if they lived in a single-family home. On the flip-side, condo/apartment owners don’t have to worry about shoveling their walkway after every winter storm as homeowners do. Nor do they have to hire a landscaper or exterior painter.
Because monthly maintenance fees can vary from one building to the next, potential owners have to shop around and consider more than just the price of the unit when purchasing an apartment or condo. You want to get a list of what the monthly maintenance fees cover so you can make an apples-to-apples comparison. Comparing a bare-bones apartment complex’s maintenance fees with one that comes with a ton of bells and whistles isn’t going to give you an accurate picture.
You also have to take into account what services you actually need or want. After all, you don’t want to buy a unit in a fancy condo, pay a fortune for all these amenities and end of using none of them. Not the gym type? Then a building that makes you pay to maintain a health club in the building may not be for you. Hate swimming? Then you’ll probably want to skip the building with a pool, particularly if it means you’ll end up paying more.
At the end of the day, which condo you choose to purchase is going to boil down to your unique personality and what you want out of the place you live. Frugal people are likely going to pay less for monthly maintenance and will likely have an easier time selling the unit, particularly if it is located in a decent resell area. People who like amenities and can afford to pay for them are going to be drawn to a building with higher monthly maintenance fees. While it may cost more, they may decide that the perks outweigh the fees.