Condo Fees v/s freehold maintainance expense

[Rocky]

Folks, If condo fees would be the only deciding factor between a buyer buying a condo or a free hold, would condo fees be more reasonable type of expense as compared to expenses of maintaining a free hold home ? understanding what the fees and maintainance covers, would an average owner be better off with condo fees living in a free hold, Does any one think - that condo fees is a costly way of monthly maintainance

 

[Therion]

I think the question is too vague to be answered in a simple way. My condo fees, after subtracting utilities and cable, come to about $500 a month (for a 1240 sq. ft. place). So I'm paying $6000 a year for a pool I never use, a dude to say "hi" when I enter the building and another dude to park my car, which is another service I never use but the old folks seem to like it. I think this is pretty useless, so I'm looking into buying a detached or semi.

It will, of course, depend on the condition of the freehold I buy whether it will cost me more or less than $6000 to maintain it. This is where building inspectors come in. You have to compare individual cases, to get an accurate answer, I think.

 

[BobBob]

Well, your maintenance fee is also paying for maintaining the building, something you'll also be doing (on a less predictable basis) in a freehold.

 

[simuls]

I actually did the math last year using a friends house in High Park and comparing it to my condo (and adjusting for the size difference - they're valued about the same though), he spends far far far more maintaining his house, paying water/gas/hyrdro bills than I would ever pay in condo fees. Most people don't factor in all of the tools, etc. needed to maintain a house and yard. Beyond the roof needing to be redone every 15 years or so, new hot water heaters, exterior paint, deck paint and fixes, rain gutters, lawn care, trees, flowers, etc. all add up to an extravagant amount of money. Plus, my water and heat are included in my condo fees and I only pay hydro (about $26/month for 1100 square feet).

I pay about the same as Therion at $6000/year, but over the past 5 years my friend has averaged closer to $10 000/year...and that's without a new roof or boiler or any major fixes.

If you add on top the ability to rent out certain parts of condo ownership (such as a parking space or locker) - which I do and they end up paying for my property taxes, then it ends up being roughly 50% cheaper in fixed costs to have my condo. I will never, ever, own a house. Waste of money, space and environmentally disastrous.

 

[fieras]

You can't compare the cost of maintaining an old house vs a new condo. Condo fees are a black hole, you'll never see that money again, so unless you need the services you're paying for, most of it is a waste.

With a newer house, you shouldn't have any big ticket fixes and even when something needs fixing, you can always do it yourself or hire a friend at a lower cost than some property management company who is overpaying for their buddies roofing services.

$500 a month, you can be driving a brand new 3 Series for that amount... or you can pay for that guy standing by the door to accept packages.

 

[Yossi Kaplan MBA]

How to Measure Monthly Costs

Folks, If condo fees would be the only deciding factor between a buyer buying a condo or a free hold, would condo fees be more reasonable type of expense as compared to expenses of maintaining a free hold home ? understanding what the fees and maintainance covers, would an average owner be better off with condo fees living in a free hold, Does any one think - that condo fees is a costly way of monthly maintainance

@Rocky

Here are two easy methods to accomplish what you want:

Option 1 - get a hold of the Corporation Status Certificate. This document has the Corporation's last year budget, including each unit's contribution. It will also tell you what is included and what is not.

Basic items that are always included are: maintenance (security, cleaning, garbage, snow removal, etc), building insurance and water.

ALL common elements will be included. If there is a pool you could calculate the relative cost of the pool and take it out of the equation. It's basic.

Option 2 - assume 50 cents per square foot of maintenance fees. For example, a 750sqft unit will average .5x750 = $375/mo.

Note that condos fees tend to be lower with newer and larger buildings, and with larger buildings (500+units) you get more amenities for the same money (the pool of mutual funds is larger, carrying more amenities).

With smaller and older buildings condo fees tend to be a bit higher (less people sharing higher fixed costs).

There are infinite variations - your condo board, technology used to build, etc.

Parking costs additional 30-40/mo. lockers 10/mo. on average.

The greatest variance I always find is in the heating costs - condos are very efficient on energy use, many small units work as a great insulator. Sunshine helps, too.

My 1940's home in Parkdale would spend 200-300/mo. in heating costs. My new condo consumes 40/mo. and that includes Carma Billings outrageous administration fees. A condo townhome will cost as much as a condo. A detached uses more energy then semi (2 outside walls). Insulation and windwos are key here.

Generally speaking older detached homes can get very expensive in the winter, so if you are thinking of buying one, always ask the seller's agent for last years energy bills - it's a common request.

All the best and good luck!

 

[Rocky]

Thank You everyone for all these wonderful responses. I am sure it gives me more sense of what to look for before making a decision

 

[slickpete83]

I live in a freehold , its worth the freedom !!!! , you can do whatever you want in your own backyard , drive way ,basment , reno whatever you like,

a friend of the family lives in condo townhouse and pays over +$300/month in fees and that doesn't even include all his bills , so over +$3600 a year , just so someone can plow your street and plant flowers , seems like total waste and all these rules , shared backyards : ( etc....

 

[BobBob]

Presumably, though, your friend will also not need to cover the cost of fixing the roof, dealing with a flood, repairing electrical, HVAC or plumbing, etc...

This is where most of the maintenance fee money goes to, not the gardener who might come by once in a while. Besides, as a condo resident, you have full insight into the budgeting and expenses, and can affect those in regular meetings, it's not like you're somehow pulled into some mysterious money-sucking scam.

Some people really don't know what they're talking about.

 

[sam13]

hi bob,

i was also initially under the impression that the most of the condo fees paid would be set aside for a rainy day requiring repair/renovation..

but as the below link shows only 10% of our condo fees goes to a reserve..in other word 90% of our fees are consumed right then & there..

http://www.tridel.com/condo/maintenance_fees.php

now i am having second thoughts about the condo fees...i an now beginning to think that condo fees are a big drain...

thanks

 

[cdr108]

From the link above, I find the following 2 items are the most wasteful which most have no control over:

Utilities: 40%
Administration / Property Mgmt.: 12%

 

[taal]

Why?

Utilities are to cover things like heat / water /electricity and so forth (varies from condo to condo). You'd need to spend that same amount (usually even more actually) in a free hold.

You're right about the administrative costs.

 

[cdr108]

The utility charges are for common elements and not one's personal suite, and is typical of most newer condos, which is why I state it is wasteful.

In a freehold, one can be more efficient about energy/utility usage and subsequently save $$$.

In a condo, the lights are on everywhere in common areas almost 24/7; constant air conditioning in the summer and heat in the winter.
There are many energy and cost savings to be had, but it starts with pre-construction and that requires developers to invest more in the building.

 

[prosperegal]

I'd still buy a condo over a house. Houses in the 416, especially near good schools are too expensive. I'm also not interested in shoveling snow or mowing the lawn (i.e. I'd have to pay someone to do it in either case), nor do I want to go to a gym somewhere else.

 

[rpgr]

I'd still buy a condo over a house. Houses in the 416, especially near good schools are too expensive. I'm also not interested in shoveling snow or mowing the lawn (i.e. I'd have to pay someone to do it in either case), nor do I want to go to a gym somewhere else.

Unfortunately having been in both house and condo I agree with the above.

Fact is living in a house/freehold has it's own headaches and unexpected costs.

Yes, I do agree it is cheaper to live in a home than a condo because of the drain that is condo fees if you're thrifty but in the end you also have to do a lot of work (shoveling snow and mowing the lawn. I remember doing this for a smaller Mcmansion growing up, after hiring someone else to do it, costs we're pretty much near condo fees for a 2Kish SQ foot condo after stuff like roofing, gutter cleaning, fixing ant holes and mouse holes on the external side).