Sunday, July 3, 2011
Buying a townhouse or a condo can be a more affordable alternative to the higher prices of houses. The number one concern I have from clients lately is the cost of the "Strata Fee" or "Maintenance Fee".
I have had quite a few listings with a higher fee in the last few years and this has caused some concern from Buyers as well as hesitation from putting pen to paper making an offer. The fee depends largely on the age of the building, what is included (ie: gas and heat), if it has a fitness centre or pool and the size of the unit. The bigger the unit the larger the fee as it is based on square footage.
If the heat and gas is included a Buyer should take this into consideration as you would not have that monthly bill. If the property has a fitness centre you can give notice at the gym and take advantage of the facilities at your doorstep!
Most importantly if the building is older and it has a rather low fee you may want to closely look at the contingency and what repairs have been done to upkeep the building. You may be paying lower monthly costs, but if there is no plan to save for the raining day repairs or major overhaul of something such as a roof, the owners may be hit with a whopping Special Assessment!
In a newer building the fees will generally start out lower, just be aware this may not be the case forever. Take into consideration if you did own your own home, as time goes on and as the house gets older you would have to put in more money over the years to replace and upgrade things such as windows, furnace, roof, painting and much much more. A Strata Fee is a way to save this money aside for those repairs in advance and also to keep the regular upkeep of the grounds to lessen the maintenance costs and keep the property looking great. There are advantages to paying a Strata Fee and living the condo/townhome lifestyle!