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Let's talk about condo fees: why are they so high? Well, let's assume for now that we're discussing conventional apartment style condos. #yycre #yyc #condolife
Condo fees are intended to cover maintenance of common property (typically exterior & mechanical, plus hallways/elevators/parkades), save for future replacement, and pay for ongoing services like garbage/recycling/snow/landscaping, plus utilities (often water/sewer and heating).
'Best practices' suggest one should ideally save ~1-1.5% of the value of the property every year for maintenance. In a condo, the fees will cover ~.75-1% of that, for exterior and mechanical maintenance. That's ~$200/month for a $250k condo, then add 15-20% for management.
From there, you'll add another $100-250/month for things like gas, water/sewer, recycling, snow removal, landscaping, etc. Remember that condos need to find private contracts to deal with ongoing those maintenance services. The management company is also on-call for emergencies.
OH! Insurance, can't forget about that. The corporation is responsible for maintaining insurance for common property. In recent years premiums & deductibles have gone through the roof, for a number of different reasons. Eg. If there has been water damage previously, it's $$$$$
Plus the prevalence of envelope studies, balcony issues, etc. is a factor. These are repair costs above and beyond expected, and therefore there will either be a smaller reserve fund (bad), fees increase, or the corporation will need to do a special assessment (aka cash call).
If you add all of this up, apartment style condo fees that start around $500 are quite common in Calgary.
One of the reasons this causes 'sticker shock' is because some folks who own a house don't necessary save as much for maintenance, and/or don't keep track of those expenses.
One of the reasons this causes 'sticker shock' is because some folks who own a house don't necessary save as much for maintenance, and/or don't keep track of those expenses.
If you're ever curious about where your fees are going, I highly suggest trying to join your condo board. No one wants to do it because it's a lot of work, but the reality is that corporations don't run themselves. Even if you outsource a lot of the work to a management company.
And on a side note, folks often complain about the cost of housing in Canada 'these days'. #yycre Just for point of reference, this is from the RBC 2019 housing report:
If you think housing costs should be lower, fair enough! Just make sure you're keeping things in perspective.
If you think housing costs should be lower, fair enough! Just make sure you're keeping things in perspective.
