Ashley Jackson knew she wanted covered parking. A fitness center and pool would be great, too. So when the 27-year-old operations manager was looking for a condo this summer, she was ready to pay higher condo fees to get those amenities.
“I am one of those people that does way too much research before getting into anything. So I kind of knew what I was getting into with [condo] fees,” she said.
In addition to paying property taxes and a mortgage, condo owners have to pay a monthly maintenance fee, called a condo fee, that goes toward running the building as a whole.
The fee, often calculated by the size of your unit, can go toward a variety of things, including the building’s master insurance policy, the cost of building repairs, landscaping, snow shoveling, concierges and upkeep on amenities such as rooftops, fitness centers or pools, as well as utilities such as water and trash. Unless waived, a percentage also goes toward a reserve fund, which is set aside to cover future big projects, like a roof replacement, building repainting or pavement resurfacing.
While it’s a relief to have all those details taken care of, keep in mind that most condo associations don’t cover anything inside your four walls. If you have a broken faucet or the carpeting needs to be replaced, that’s on you. Jackson knew going in what was covered and what wasn’t.
After looking at four buildings, Jackson chose a one-bedroom, one-bathroom unit in a West Alexandria building with friendly neighbors and just the right number of amenities. The $386 a month she pays in condo fees goes to a fitness center, pool, and covered parking, plus a Metro shuttle, maintenance, water, sewage and trash.
Jackson initially liked a unit in another building, but the fee was $50 more — not a huge amount each month, but not worth it when she estimated her budget.
“Over a year, or years, that adds up very quickly,” she said.
Dare Johnson Wenzler, a Realtor with Compass Real Estate, says that when it comes to condos, fees are always a big part of her conversations with clients.
“Usually when you go show a property, the first thing someone wants to know is, ‘Well, how much is the list price on this again?’ That’s the first question.
“And then if it’s a condo, the second question is, ‘What’s the condo fee and what does it include?’ ” she said.
Wenzler adds that she’s seen fees as low as $100 and $150. In those smaller buildings, the fee typically goes only toward the master insurance policy, trash, water, maintenance and the reserve.
On the other end of the spectrum are the condo fees of $700 to $1,000, which can include a 24/7 concierge, larger gyms, lounges, and party room rentals.
Those perks can seem like a good deal going in, but Jackson recommends being honest with yourself (and your bank account) when looking at the amenities offered.
“There was one building that was like a resort — six different pools, two tennis courts,” she said. “The condo fees were $600 for one bedroom. You’re paying for all that stuff, are you really going to use it?”
Another thing to note: Condo fees can change each year — up or down — based on the building’s operating budget, says Rick Amos, a loan officer with Monarch Bank.
He adds that in addition to the monthly fees, associations sometimes charge a special assessment when there’s an outstanding debt the building needs to pay or when a large project comes up and the building doesn’t have enough money for it in reserve.
Condo fees are typically higher than standard homeowners’ association (HOA) fees because condo fees include the building’s master insurance policy and building maintenance, and may include some utilities, in addition to other amenities not typically included in an HOA, according to Amanda Griffin of Long & Foster real estate.
Griffin adds that the condo fee amount is also factored into whether the buyer will pre-qualify for a loan; sometimes that total monthly payment pushes a condo out of a buyer’s price range.
“It sometimes can be a deal-breaker,” she said.
Griffin’s client, Joyce Connolly, 52, paid close to $100 a month for HOA fees for the townhome she moved out of earlier this year, and she knew she’d be paying more than that for a condo.
Connolly, a federal government worker, wanted a smaller place with lower property taxes, and she wanted to have the conveniences a condo offered. She bought a two-bedroom, two-bathroom in Alexandria and pays $380 a month in fees for the unit.
“I look out on woods behind me, which is something I was really hoping for,” she said. “It’s very well maintained. It’s a very pleasant area; it was perfect for me.”
And, like many condo owners, she’s more than happy to pay a little bit more to have the convenience of not having to take care of some things herself. Connolly’s condo fee covers exterior maintenance, water, trash and recycling, a swimming pool, a storage unit and parking. In winter, the shoveling is also taken care of, Connolly says.
“It’s something off my plate. It’s almost like treating myself,” she said.
There are one-time fees, too!
Condo costs aren’t all included in your monthly mortgage and condo fees. There are a few one-time fees that you have to pay when you buy a place.
Though the seller typically pays the Realtors’ fees, many first-time buyers forget they have to pay for a home inspection (approximately $300 to $400) and an appraisal (approximately $400 to $500) before they can sign a deal, Long & Foster agent Amanda Griffin says. Both are paid up front or at closing.
And don’t forget that every buyer has to purchase a condo questionnaire, which can cost up to $250. The document is provided by the condo association, and it details the association’s finances, whether there are lawsuits pending against the building, the percent of investor units versus owner-occupied units, and even the number of condo residents who might be behind in their condo fees, says Rick Amos, a loan officer with Monarch Bank.
“It’s something that the underwriters look at” to check the financial health of the association, Amos said.
But he opted not to say whether his bank has ever declined a loan for a buyer because of a condo association’s poor finances.
“If there’s a chance that [the] association doesn’t have money in their coffers, the mortgage place won’t approve you,” recent condo-buyer Ashley Jackson said. “Because they won’t get their money back if [the condo building] goes under,” she said.
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