Do the math.
It’s slim pickings on the Halifax peninsula if you’re interested in a quiet, high-end condo. Your selection is even narrower if your mandate is to find one with reasonable condo fees.
A lot of people underestimate the impact of condo fees. After all, you’re running the numbers, looking at monthly costs all in…but when you start to view things with a longer lens (say, five years – which is a reasonable time frame)…it’s worth giving pause for thought. Here’s a scenario based on a listing at Q Lofts and an active resale listing right now.
You can purchase a large corner suite at Q for $499,900 and pay only $301/month in condo fees. Or, right now, you can buy a similarly-sized used condo in the south end for $20K less with condo fees of $530/month.
Some simple math to consider:
The additional $20K in purchase price for a Q Loft translates into approximately $75 more dollars on a monthly mortgage payment. Over five years, that amounts to $4,500 – all of which is going towards paying down your mortgage and building equity in your condo.
In that same five years, you’ll spend an additional $14,040 on condo fees on the “less expensive” condo. If you subtract the additional amount on your mortgage from the additional amount being paid in fees, it’s still almost $10,000 more of your money. That could be used towards more things that bring you joy!
Now, some folks think condos fees are evil. They’re not evil: they cover important items…the very things that make condo living so attractive. You don’t have to think about activities that eat into your time, such as shoveling or scraping a car in winter or mowing a lawn and cleaning eavestroughs. Not to mention, all of the costs associated with regular, seasonal maintenance of a home. Then there’s the ‘freedom factor’: knowing that you can just lock and go at any point in time (especially with a Resident Manager on site to keep an eye on things).
You think renting is better?
There will be some folks who say they can get those same freedoms with a rental property. True. But don’t get me started on the total cost of five years of renting ($2,000/mo for a nice apartment on the peninsula totals $120,000). That’s a different blog post altogether!
It’s math. It’s logical.
The bottom line is that condo fees impact your bottom line. Pay attention to what they cover! Check the reserve fund study to ensure all elements of the building maintenance have been covered. Check how the building you’re considering making your home is actually constructed. Take the time to calculate the cost-per-square-foot (sf) that you’ll be paying for your fee. If you can find one under 30 cents a square foot, you’re laughing. Other major centres in Canada have fees ranging as high at 75 – 90 cents. Halifax is more reasonable, yet you’ll still find many condos north of 45 cents per sf. Check the condo fee increase history of other condos created by your builder. That is a good indicator of what’s to come.