Why are HOA fees for condos so expensive? (Dallas: real estate, apartments)

[mikejj2004]

I don't need that much space and don't want to live in the suburbs, I currently live in 75201 (downtown). There are a lot of condos/converted apartments that are very affordable in Dallas say $100,000, yet they have HOA fees nearly $200/month. I view that as a straight up involuntary tax and literally a borderline scam. $200 x 12 = $2400 amortized at 6% = $40,000. $25/month would be reasonable for commond maitenance and then every owner himself had to have his own insurance/utilities etc.

[cdelena]

Often covers insurance, maintenance, upkeep, and services. A condo is shared ownership and operation... be sure you understand what you are buying into.

[TurtleCreek80]

I am in a condo high-rise and dues are around $500/mo for a 1/1. $25/mo would NEVER cover the following expenses typically included in condo dues:

-insurance for the building, which in a high-rise is expensive commercial grade construction. My condo insurance is cheap ($600/yr) & only covers within my unit's four walls.

-salaries and benefits for the building's staff: property mgmt company & manager, part-time and full-time doormen, security officer who walks the grounds at night, dockmaster, & valets for garage.

-maintenance of grounds, which can include pool and tennis courts, plus several acres of green space in some buildings

-reserve fund, so the HOA won't send you a bill every time the boiler breaks or the elevator's out of service and a repair man is called.

-my dues include all bills (electric, gas, water, sewer, & basic cable).

So, no, it's not a scam. It takes a crapload of money to operate a mid- to high-rise building.

If you do look into buying one, be sure you get a lawyer & accountant to scour over the building's finances & be sure the HOA is sitting on a nice stash of reserve funds. You will also need to contact the board to see if there are any current or upcoming assessments, or if any assessment votes are scheduled in the near future. Assessments are your responsibility as a condo owner and non-payment can result in forclosure. The Vendome, Worthington (2 back to back assessments), and 21 Turtle Creek properties have all recently (or currently) gone through assessments of minimum $5k per unit. Some up into the $10-20k+ range.

[JS1]

That still seems awfully high. I used to live in a two bedroom co-op in Queens, NY, and the maintenance fee was $600 a month. Condo maintenance is less because the $600 at the co-op includes payments on the underlying mortgage (no such thing with a condo).

I'm not a condo expert but $500 a month in Dallas (or even $200) for a one bedroom strikes me as just outrageous, unless the building has some sweet amenities, like a full-time doorman, fitness center and swimming pool.

[nsumner]

The HOA dues at the Athena high rise are over $1200 a month. Yes electricity and water, cable, fitness center, indoor and outdoor pools, valet, concierge service are included... Some others have monthly dues over 2K.

Naima

[TurtleCreek80]

That is what my building has - 24 hour doorman & garage valets, new gym, pool, acres of green space, prime Turtle Creek location. And it includes ALL bills.

For a single girl who travels a lot, it is worth the price to know my dates have to get past the doorman and my place is safe while I'm out of town.

Not for everyone, but for me, it's perfect!

[galore]

So a condo is like an apartment with a mortgage?

[desibear]

As another data point, my current 1/1.5 in downtown Chicago highrise has $537/mo in maintenance plus $480 for parking for 2 cars, so in total I pay over a $1000 in fees in addition to mortgage/taxes etc.. This isn't unusual at all. Highrises are expensive to maintain and real estate in it is at a premium.

[mikejj2004]

Thank you for the info TurtleCreek80, I must say I'm shocked of HOA fees of $500 a month and they can charge you assesments over that which I didn't even know. I pay $768/month to rent an apartment in Victory Park, granted I think market rent would be $960 and I got a special deal for taking over someone lease who wanted out, its not a high rise but the land is arguably one of the most expensive in all of Dallas, $40 million according to DCAD. It has every amenity imaginable from security, free gym, pool ect. If your paying $500/month plus say $250/month property taxes that is as much as my rent. The difference is to live here, I signed a piece of paper whereas you had to pay $100,000+ whether you borrowed it or paid cash. That seems like a horrible deal. What is so expensive about high rises anyway? Non-highrise condos also have high fees I don't think its high rise specific.

[TurtleCreek80]

You are correct - our monthly living expenses are in the same ballpark, but I get a $13,000 tax deduction for being a homeowner & paying mortgage interest + property taxes. If we have equal take-home pay and same other standard deduction items, I have roughly $4,000 more in my pocket than you every year.

Plus, in 20 years when this place is paid off (if not sooner), I'll own a very low maintenance (as in physical labor on my part) rental propery that nets me $6-8k per year in today's dollars. Or I can sell at a profit because they're not making any more land on Turtle Creek.