Condo Fees vs. House Expenses

[00:00:00] Since houses don’t have condo fees there are always a better deal aren’t they. Well not so fast. Let’s take a look at the facts on this episode of Winnipeg’s real estate podcast.  You’re listening to Winnipeg’s real estate podcast with Bo Kauffmann of Remax performance realty.  We are answering questions for buyers and sellers of homes and condos in Winnipeg.

Hi this is Bo Kauffmann of Remax performance realty here in Winnipeg.  I am your residential real estate expert working with home and condo buyers and sellers. The question I quite commonly get from somebody is looking to buy their maybe their first home.   They say well why would I buy a condo thats got condo fees? Houses don’t have those fees so obviously house is a much better deal.  A much better bargain than a condo.

Well not so fast. I mean there might be a number of reasons why you would not want to buy a condo. Perhaps it’s the wrong thing for the wrong lifestyle. Perhaps you like a yard there’s a number of reasons why condos won’t work for you but the condo fee itself is not necessarily the reason you should not buy one.  Take a look at the imaginary 200000 dollar house and compare it to a condo of roughly the same value.

Let’s take a closer look

And let’s assume that that condo comes with a 275 dollar a month condo fee. So let’s take a look at some of the things that condo fee pays for that start for example with water. Almost all, I would say 99 percent of condos, the fee includes your water bill. [00:01:44][103.5]

[00:01:45] So you don’t have an added water bill whereas in a house you’ve got a water loan. You know your inside water, outside water. You’ve got to budget at least 60 to 70 dollars a month for your water bill. So that’s that’s already included in the condo fee heating bills.

Now in a lot of condos there are heating bill is also included but let’s say it’s not included in the 275 dollars. It’s not included but it’s a high rise condo it’s like an apartment style or even a townhouse style. I can tell you that the heating in those units is going to be significantly less than a standalone house.

Why is heating a condo less expensive?

And that’s the reason is you’re surrounded by other units. You’re protected from the elements by other units and the hallway units above you perhaps units below you. So your average heating bill is going to be well below 50 dollars.  In a house you’ve probably got a budget for at least a hundred dollars. And I would suggest that if it’s a 200000 dollar house you’ll even have to budget for more than that.

Home insurance: if you buy a house you need home insurance. Property insurance is mandatory if you’re getting a mortgage. The bank will demand that you get property insurance so that that’ll cost you anywhere from 60 70 dollars 75 dollars a month minimum depending on how big the house is what part of the city it’s in. You’ve got a budget at least seventy five dollars a month whereas in a condo the building itself is already insured. It’s part of your condo fee. [00:03:10][85.2]

What do Condo Fees pay for?

[00:03:11] So instead of seventy five dollars a month you might be looking at 20 dollars a month for what’s called condo improvement or condo ownership insurance. So it significantly less. The other thing is if you’re buying a 200000 dollar a house I would strongly suggest that you start putting away money.  For things like roof repair a leaky faucet window replacement door replacement.

Furnace breaks down hot water tank any number of things that can go wrong. You should start your own reserve fund and that’s already included in the condo fee.   So that if the building needs a new roof they should have a reserve fund for that already so you wouldn’t have to pay extra for that. So in a condo you’ll probably have less expenses. Now that’s not to say that they wouldn’t have a special assessment coming up once in a while. That’s entirely possible. But for your average maintenance on the outside of the building that should be covered by the condo fee.

Condo fees don’t look so bad now

So add those up and all of the sudden the condo fee doesn’t look that bad anymore. Because it includes the water. It includes possibly part of the heating. It gives you cheaper home insurance. So the condo fee itself should not detract you from buying a condo. I firmly believe that the whole condo versus House debate revolves around lifestyle. If you’re traveling individual who likes to travel.  Who doesn’t want to do yard work who leaves their home maybe two months of the year then a condo is definitely worth looking at. If you have somebody that’s got children and pets and you need a backyard and the condo is probably not for you. [00:04:53][102.3]

[00:04:54] But it’s best determined by having a meeting by sitting down and discussing your options.  Like your budget and what you’re looking for as far as lifestyle goes. So if you’re looking to buy a house or a condo and when you pay you may call me anytime, at Remax performance realty area code 204 at 333-2202 [00:05:11][16.8]

[00:05:21] We hope you’ve enjoyed this episode of Winnipeg’s real estate podcast all episodes are available on iTunes and Stitcher when you’re ready to buy or sell a house or a condo in Winnipeg. Contact Bo Kauffmann at REMAX performance realty at 204-333-2202 or email [email protected] [00:05:34]