Fees/taxes on condos?

[mmyk72]

Originally Posted by BostonMike7

Also, Condo fees can go up. Depends on your building, management company, insurance, costs, etc.

I recently had mine jump from $275/mo to $330/mo due to a chance in insurance company to cover the building.

I live in a small unit so no management fees involved . Since I deal with the master insurance, I know that our policy would've gone up a lot at this year's renewal. But our insurance agent suggested switching to another carrier and we ended up saving 1K compared to last yr, translating to a few hundred bucks lower per unit for the yr.

[495neighbor]

Originally Posted by MikePRU

Good point! I would also add that when buying a new construction condo that the fee is often kept artificially low by the developer. Once the owners take over it goes up.

Good point Mike. I've noticed that many multifamily conversions often fall into that same issue. I ran into one in one of the most high prestigious towns a few years ago. Beautiful space for the price and then I saw that $100/month condo fee. Red flag, if it is too good to be true. I'd hate to be the person reasoning with one or two other reluctant owners when it came time for a big repair.

[MikePRU]

Originally Posted by 495neighbor

Good point Mike. I've noticed that many multifamily conversions often fall into that same issue. I ran into one in one of the most high prestigious towns a few years ago. Beautiful space for the price and then I saw that $100/month condo fee. Red flag, if it is too good to be true. I'd hate to be the person reasoning with one or two other reluctant owners when it came time for a big repair.

Sometimes in smaller developments like that the fee is low because the only thing it covers is the master insurance.

In a lot of the new construction condo developments the builder will hire himself to do things like landscape and plow. Of course, he'll pay himself less than market rate which keeps the condo fee low. Once the developer hands over control to the owners and they hire people at a reasonable rate to perform these tasks (and also often hire a management company to help them) then the condo fee jumps up quite a bit.

[495neighbor]

Originally Posted by mmyk72

I live in a small unit so no management fees involved . Since I deal with the master insurance, I know that our policy would've gone up a lot at this year's renewal. But our insurance agent suggested switching to another carrier and we ended up saving 1K compared to last yr, translating to a few hundred bucks lower per unit for the yr.

I think you meant small complex not small unit, right?

[495neighbor]

Originally Posted by MikePRU

Sometimes in smaller developments like that the fee is low because the only thing it covers is the master insurance.

In a lot of the new construction condo developments the builder will hire himself to do things like landscape and plow. Of course, he'll pay himself less than market rate which keeps the condo fee low. Once the developer hands over control to the owners and they hire people at a reasonable rate to perform these tasks (and also often hire a management company to help them) then the condo fee jumps up quite a bit.

Mike, if you read my original post, the one I was referring to was a former near mansion home likely dated from the 1800s divided into three units. I think this is much more risky than the situation you are referring to with a smaller new construction complex.

[mmyk72]

Originally Posted by 495neighbor

I think you meant small complex not small unit, right?

Yeah, small complex. Thanks for correction.

Also ours is a newer construction with very little exterior maintenance/repairs needed. They only 'operating' cost that all of the owners in the complex share is master insurance and landscaping (lawnmowing, etc.). We have individual driveways and each unit takes care of its own snow removal. I've also volunteered to trim a lot of bushes in the common outside areas (they are closest to my unit anyway) which saved everyone a lot of money compared to having a landscaper do the trimming.

You're right that if it's an old building 'conversion', then there could be more maintenance issues that come up and getting all the unit owners to agree to pay for a repair may be a headache.

[MikePRU]

Originally Posted by 495neighbor

Mike, if you read my original post, the one I was referring to was a former near mansion home likely dated from the 1800s divided into three units. I think this is much more risky than the situation you are referring to with a smaller new construction complex.

Any three unit ownership arrangement is bound to be higher risk than a 100 unit or even 10 unit arrangement. Two unit complexes are even higher risk. Older buildings also carry with them a higher risk for maintenance costs as well (see my earlier comment about making sure your inspector looks at the common areas). However, I have seen relatively new associations issue special assessments as well. If anything goes wrong in a relatively young association there are little to no reserves to draw on in order to solve the problem.

I wasn't trying to say there's more risk in one situation than another. In the end though, the bottom line is that there's an inherent risk in homeownership. Whether you're buying a condo or a single family home it's important to do as much due diligence as possible to understand what you're getting into by buying a particular property. You'll never know for 100% for sure but it's a whole lot better than going in totally blind.