Condo Fees vs. Home Ownership

[Ex-Montreal Girl]

I am always amazed how people will shell out hundreds of thousands of dollars without doing their homework. Boggles my mind.

We do get a reduced rate on our insurance because it's from the same provider we get our car insurance from; we're a long-time customer and get a bunch of discounts . We also keep a high deductible and always have to help reduce insurance costs. But yes, upgrades (we have a bunch), how much you want to cover your contents for, level of liability, etc. all impact price as does age of the building. We had an insurance info session for owners and everyone was paying $200/year or less -- it's a new building. (Our corporation insurance covers earthquakes!)

It's also important to read your corporation condo insurance to know what's covered and what's not -- I know a number of people who were overpaying for their personal insurance because they were in effect double covered, not realizing what was already covered via their maintenance fees. On the flip side, you don't want to leave something out.

It can be a good idea to get your personal condo insurance from the same provider that covers the corporation; it can help streamline the process in the event of a claim.

I bet we have the same building management as we recently also had an insurance seminar. Apparently some scary flooding incidents around the GTA prompted this.

As for earthquake coverage, yes, our building has it but it doesn't cover things like our big flat screens falling off walls or irreplaceable antique armoires loaded with china and crystal or stereo equipment tipping over. Maybe next year we will reconsider. Thanks for the tip.

 

[PinkLucy]

Probably not the same management -- we just switched And the seminar was at the suggestion of the board.

I don't have any antiques or irreplaceable items any more -- got rid of all of those when I sold the giant house!

 

[rbt]

My understanding is that property taxes aren't bundled with condo fees... is that right? Same with insurance, telephone and security.

It varies from building to building.

In-suite security, when installed by the developer, often is included. In fact, it is often controlled/answered by the front desk and managed by building management (maintenance, repairs, etc.).

Phone (SIP based now), TV/Cable, and internet are features some condos include but certainly not all.

Insurance ($250/year for me) and property taxes ($2200/year) are almost never included in condo fees.

My all-in housing costs (clear title) for 2 people are about $650/month (condo fees, property taxes, insurance, electricity, and internet; no parking/car) near Yonge/Bloor. I also have a U of T gym membership ($70/month) but most residents would use the buildings gym.

 

[W. K. Lis]

At least with condos, a "McMansion" tax would be less. However, there still is the surface parking lots that should be included in the "McMansion" tax.

See The Star, at this link:

That's the roof size (and asphalt driveways/parking lots) that determines the tax.

 

[James]

I'm not sure why this is called a McMansion tax, aside from getting the general population into a tizzy, as it essentially applies to all types of houses. Larger houses will, expectedly, be tiered at a higher rate. Pretty simple. This is nothing more than a new stormwater tax proportional to the size of your house. It is disconnected from actual stormwater drainage of your lot, as you could have a large house sitting on a huge 1 acre piece of land which provides plenty of absorption. You'll still be charged the same amount as someone with the same size house that's taking up almost its entire lot.

 

[W. K. Lis]

More likely the "McMansion" tax could speed up the end of bungalows, single-story stores and malls, single-story warehouses, and single-story factories. Surface parking lots are frowned up, but will continue for now.

 

[junior43]

So I'm now entertaining buying a condo I've read this whole thread and understand that each building varies on what is and isn't included in the condo fees. I'm looking to buy into a condo that's still being built. Considering this I can't really evaluate the condo board, etc. but I'm wondering if anyone has any thoughts on what I should be concerned about when buying in this scenario regarding the fees. They say they will be $0.48/sq ft. Is that reasonable on a new build?

FYI - The condo I'm looking at is Kingston&co on Kingston road just east of VP.

Also, does anyone know anything about the builder (I believe it's TAS) or can they point to where I could find out about the quality of the builder?

 

[PinkLucy]

Developers typically lowball the condo fees to entice buyers. $.48 is on the low end so enjoy it for the first year and then expect a significant increase.

Do you know what the fees will cover? The biggest costs are generally security (if there is concierge staff), management and cleaning. And then there are utilities -- will the building have LED lighting? It brings down electricity costs significantly.

There are lots of factors to consider. Be proactive. Ask questions. Visit customer care and property management as soon as possible. Join the board

 

[junior43]

Developers typically lowball the condo fees to entice buyers. $.48 is on the low end so enjoy it for the first year and then expect a significant increase.

Do you know what the fees will cover? The biggest costs are generally security (if there is concierge staff), management and cleaning. And then there are utilities -- will the building have LED lighting? It brings down electricity costs significantly.

There are lots of factors to consider. Be proactive. Ask questions. Visit customer care and property management as soon as possible. Join the board

I believe no utilities are included, except garbage. There is a concierge - and I'll definitely be joining the board or attending all the meetings if I do this.

There's also retail at street level - and there appears to be a green P lot under the building as well. Do these things help in reducing the condo fees (eg rent from retail, leasing the parking to the city)? Or are they separate from condo management and fees? or is this another Q for them?

What's a significant increase? 25% to .60 /sq ft?

Going by the sales office in another hour or so. So I'll be checking/asking a lot of stuff to confirm things.

 

[rbt]

They say they will be $0.48/sq ft. Is that reasonable on a new build?

Plan on something closer to 60 cents/sqft after about 3 to 5 years after occupancy and be pleasantly surprised if it remains lower. The developer is required to top-up a few things when the fees rises over the first couple years but since a realistic number doesn't get buyers, they plan for a subsidy as part of their marketing budget.


Many boards dislike investing in energy efficiency stuff (costs money now, big savings later but that's later man), so they tend to rise fairly quickly on stupid things (air-conditioning the elevator mechanical room via the 40ton roof unit in January because nobody will pay for a fan hole/free-air cooling to the outside). A board which thinks long-term will save a bundle over a 20 year period; most don't seem to be that bright.

 

[PinkLucy]

I believe no utilities are included, except garbage. There is a concierge - and I'll definitely be joining the board or attending all the meetings if I do this.

There's also retail at street level - and there appears to be a green P lot under the building as well. Do these things help in reducing the condo fees (eg rent from retail, leasing the parking to the city)? Or are they separate from condo management and fees? or is this another Q for them?

What's a significant increase? 25% to .60 /sq ft?

Going by the sales office in another hour or so. So I'll be checking/asking a lot of stuff to confirm things.

A significant increase could be anything -- I've heard of 25% in some horror stories. There's really no way to know at this point.

The retail will depend how it's set up. Some buildings own the retail units and collect rent on them, others don't (mine doesn't -- individual owners own all of those units).

We do rent out a couple of parking spaces to Zip car but that income doesn't have much impact on the overall budget.

Another factor is just what the developer provides. For example, my building came equipped with 6 security cameras for the entire building -- so the first year, we had to spend a significant amount of money adding cameras. Security was a major concern from our residents.

I haven't had any experience with shared parking with Green P, but I've always wondered about it!

 

[PinkLucy]

Many boards dislike investing in energy efficiency stuff (costs money now, big savings later but that's later man), so they tend to rise fairly quickly on stupid things (air-conditioning the elevator mechanical room via the 40ton roof unit in January because nobody will pay for a fan hole/free-air cooling to the outside). A board which thinks long-term will save a bundle over a 20 year period; most don't seem to be that bright.

So short-sighted, especially since there are a number of government initiatives that help cover the costs, you can spread out the payments, payback can be pretty quick (depending on what the initiative is)

 

[rbt]

So short-sighted, especially since there are a number of government initiatives that help cover the costs, you can spread out the payments, payback can be pretty quick (depending on what the initiative is)

Very short-sighted for most owners. Some buildings have a minority of units owned by friends of the developer (employees, friends/family, deeply discounted investor units) who will take efforts to prevent the developer from looking bad.

They might be a minority of owners but organized they can make a plurality at a board election (25% of owners voting means they only need 13% of units).

 

[junior43]

Thanks for all the advice. So utilities (and cable) are excluded - except nat gas for heat (and stove and bbq if you select). Found it sort of odd, but I'm not complaining - I may upgrade to gas stove just because I'm cheap .

It appears it has it's own type of small furnace (or maybe it's just a blower or something) but how loud are these things? I also would have control of heat and a/c so I'm not governed by a property manager for when the switchover is. Hot water system is some type of central one (one giant boiler for everyone) - maybe that's why gas is included, I dunno.

Any advice on blomberg appliances as well? (still need to google, etc) Everything was this make except micro.

Sales guy was dodging a bit on how the retail works (we own/lease, or some one else) but I also didn't push him on it yet since I was still exploring at the time.

Crunching numbers (I'd be mortgage free) and thinking of the view (trees and lake to SE and good chance of CBD to the west) and new everything (I'm in a post WWII bungalow, w/ original kitchen. eww)) it's now waaaaay past exploring (already contacted FI my mortgage is with for financing and about to email friend/RE agent for advice and eventual sale of my house).

I've always been resistant of condos, but holy crap, it's so tempting. I'd have walking distance retail/bars/restaurants/transit(streetcars) and tonnes of other stuff I have to drive to now. Sales guy said there's potential for TD branch (my bank), independent grocer and LCBO in retail base, but I'm guessing that's BS so early on (56% sold).

Only downsides so far are longer (but cheaper) commute downtown (streetcar vs. GO train from Scar stn) And having to take my dog out for breaks when he has free range in the backyard now - and he'll only have 3-5 years left once I move in. Oh, and my parents are in walking distance, that's in both good and bad columns LOL.

 

[rbt]

Thanks for all the advice. So utilities (and cable) are excluded - except nat gas for heat (and stove and bbq if you select). Found it sort of odd, but I'm not complaining - I may upgrade to gas stove just because I'm cheap .

It appears it has it's own type of small furnace (or maybe it's just a blower or something) but how loud are these things? I also would have control of heat and a/c so I'm not governed by a property manager for when the switchover is. Hot water system is some type of central one (one giant boiler for everyone) - maybe that's why gas is included, I dunno.

Probably a heat exchanger. Buildings run water to your unit and it blows a fan over them into your unit. Sometimes you get hot and cold year round, sometimes it's only one or the other. That really depends on how the building was plumbed.

Many newer buildings are running 4 pipes (hot and cold) so you can use either heat or air-conditioning at any time of the year.

Sales guy was dodging a bit on how the retail works (we own/lease, or some one else) but I also didn't push him on it yet since I was still exploring at the time.

Don't believe a word the sales guy actually says. First page of your contract with the builder will be text that effectively says you shouldn't believe anything the sales guy said, everything is in the agreement. If the agreement doesn't have measurements, but the sales guy did, then you don't have measurements. If the sales guy says you get a parking space on P1 but the agreement says it's to be assigned later, you will get a randomly assigned parking place.

Your lawyer will tell you far more about what you are buying than the sales guy can. Spend a bit extra on your lawyer to have them adjust the contract language to get what you want too (be that locking down closing costs, a specific parking level, or anything the sales guy said you get but the contract doesn't include). The developer will bounce back ~50% of what you ask for.

Sales guy said there's potential for TD branch (my bank), independent grocer and LCBO in retail base, but I'm guessing that's BS so early on (56% sold).

He'll know as much about the retail as who your new neighbour will rent their unit out to.