When buyers evaluate the purchase of a condominium unit, one of the biggest concerns is the monthly condominium fee. In DC, we have such a wide range of condo buildings - varying in age, size, and amenities. This can make comparing condo fees at various buildings like comparing apples to oranges. It requires more than a passing glance at the overall fee to really determine if the monthly cost makes sense for your budget. What does a condo fee include?
Usually, the condo fee includes at least: association management, master building insurance policy (not counting your individual homeowner's policy), water, trash removal, landscaping, and reserves contribution. Ask about these items that can affect the condo fee:
What is NOT included in a condo fee?
- Utilities - Older buildings tend to have commonly shared utilities with no separate meters, so electricity and gas could be included in your condo fee. On the flip side, some new buidlings now include cable and/or internet service.
- Amenities - Anything from elevators to fitness rooms to pools can add to your condo fee.
- Building staff - This can be a huge expense. Before committing to a large condo fee, consider whether additional building staff such as 24-hour front desk, parking attendants, and doormen are important to you. A building with minimal staff may better suit your budget.
- Parking - If your potential purchase has a parking space, find out if it is included in your condo fee or if there will be an additional fee for the parking space.
- Real Estate Taxes
- Homeowner's Insurance Policy
- Incidental association fees: move-in fees, pet fees, etc.
Did you know that most condominium unit owners receive a trash collection credit on their DC property tax bills? This offsets the cost of the private trash collection that's typically wrapped into your condo fee.
A general rule of thumb for condominium associations is that at least 10% of the budgeted income should be allocated to reserve contribution. This benchmark is important for two reasons: it helps ensure the building is properly funded for future capital expenditures for major repairs, and it is generally a requirement for lenders.