What is a Condominium Fee
A condominium fee is paid by all property owners of a condominium complex to cover ongoing maintenance costs. The fee is often based on the size of the condo unit and anticipated annual expenses.
Breaking Down Condominium Fee
Condominium fees are the agreed-upon sums paid by each owner of a condo unit to the condo association for maintaining the overall appearance and upkeep of the community. The condo association meets regularly to prioritize work projects and submit and consider bids for work to be done for the entire complex.
Condominiums often appeal to people who don’t want to worry about the upkeep of their property and grounds. A key selling advantage of a condo is the low maintenance nature of the living arrangement. Part of the appeal of condo ownership is knowing the entire condo neighborhood will be maintained so no one property falls into disrepair, reducing the value of the others. One of the drawbacks of living in a regular neighborhood is the possibility that one neighbor’s neglected property will detract from the appeal and resale value of the total neighborhood.
A well-managed condo association will maintain a reserve fund for handling any unexpected maintenance projects. These condominium fees must continue to be paid even after any mortgages have been paid off. In essence, each condo owner within the development is setting aside repair monies on a regular basis, which stands in contrast to the amount of any large repair payments they would need to make by owning a standalone home.
Pros and Cons of Condo Fees
The pros of condo fees include the ease of dealing with maintenance costs and the time saved in getting repair and service bids from vendors. The condo owner is able to spread out in equal monthly payments the repair costs that go into maintaining a property. This provides predictability in budgeting, especially important to senior citizens living on fixed incomes.
The cons include the fact that the condo fees will be calculated in any mortgage qualifications and in some cases may push the borrower beyond accepted income-to-expense ratios. Also, one homeowner might take better care of their property than another homeowner, yet will be penalized through their condo fee in covering the expenses of everyone living in the condo development.
Some homeowners prefer to be solely responsible for their own living quarters and repairs. Additionally, some home owners may be able to perform their own repairs at less cost than will be negotiated through the condo association dealing with service providers. Ultimately, owning a condo is a decision to live in a communal setting where everyone agrees to pool their monies for the betterment of the community.