Why Do SOME Condo Units Have Super High Condo Fees?
I get this question all the time. Why do condo fees vary from building to building?
Generally speaking,the answer is simple, yet sometimes detailed. Let’s start with what almost all condo fees (here in Center City Philadelphia) cover: Master Insurance Policy, common building lighting, building maintenance, water and sewer, and a what I call a "Rainy Day" fund for future improvements. This is generally true of low rise , mid rise, and high rise condos.
The base condo fees cover all of the above. Now we need to add in services-
Elevator: Some low rise condo buildings don’t have them. Therefore, they don’t have the fees to operate and maintain
Front Door Person: It does cost you to staff this position…Employees are not cheap!
Swimming Pools: If you building has one, it is going to cost you higher fees than if you didn’t have one (duh)
Management: Low rise (say, five unit buildings) usually are self managed, and avoid this cost
Extras: Chauffeur, dog walking, room service, etc. YOU GOTTA PAY TO PLAY
Every now and again, I will run across someone in a low rise building that says to me, "My condo fees are $25 a month," and they think this is a good thing. I would suggest it isn’t. If your association has enough in reserves to not collect for daily operation of the building, then you are simply draining from the savings account. And I would venture to guess that your building suffers from a lack of (much needed) on-going maintenance. I often encourage associations to keep the fees going, even if there is a lot of money in the associations account.
Condo fees that are too high can be a stopper for some buyers, as they are NOT looking for the services afforded by such fees. Conversely, condo fees that are too low can be a signal of a lack of ongoing maintenance (as evidenced by worn hallway carpets and paint, rotted exterior window sills, an old roof, etc).
We welcome your input/comments on this post!
Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Philadelphia, PA 19106
