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Condo Fees vs. Home Ownership

Shouldn't this thread be called "Condo Fees vs. House Maintenance"? Home ownership includes condos.
 
recently saw an episode of 'till debt do us part' with gail vox oxley
- she mentioned that it costs from 3-5% annually of the price of the property to maintain
 
recently saw an episode of 'till debt do us part' with gail vox oxley
- she mentioned that it costs from 3-5% annually of the price of the property to maintain
That might be true in certain places, but not in Toronto, at least at the higher end. That's $50000 a year to maintain a $1 million home. We've discussed this before, albeit in another thread, but it seems most of us think it's a gross overestimate.

Plus it depends on how you define maintenance costs. If it costs $15-20 for the local kid to cut your grass, and $40 for a lawn service to do it, which do you call correct? What about if you do it yourself, as exercise?
 
That might be true in certain places, but not in Toronto, at least at the higher end. That's $50000 a year to maintain a $1 million home. We've discussed this before, albeit in another thread, but it seems most of us think it's a gross overestimate.

Plus it depends on how you define maintenance costs. If it costs $15-20 for the local kid to cut your grass, and $40 for a lawn service to do it, which do you call correct? What about if you do it yourself, as exercise?

maintenance also includes replacing worn capital structural items like windows, roofing, hvac systems, driveways, kitchen and bath renos, etc.

regarding lawn care, that's up to the individual but still shouldn't discount the cost of doing it yourself with time/labour and equipment purchase/maintenance, etc.
 
maintenance also includes replacing worn capital structural items like windows, roofing, hvac systems, driveways, kitchen and bath renos, etc.
For $50000 a year on a $1 million home in the Toronto core, you could do that every 5 years or so, and pay for all your other maintenance too. Remember, that's well over $4000 per month! However, windows last for 25 years or in some cases much longer. Roofs last for 15-25 years. HVAC systems last for 15-20 years, although my neighbour has been running his for over 25. Yeah, it's an inefficient old beast, but maybe he spends $200 too much every year in heating bills, to save forking out $3500 for a new furnace right now. Kitchens and bathrooms should last for a couple of decades too.

Let's take a more extreme example... For a modest home in Forest Hill, it may cost $2 million. Three to five percent of that is $60000 to $100000 per year, or about $5000 to well over $8000 per month! That same home in another part of Ontario may cost $500000, but 3-5 percent per year is $15000 to $25000, or $1250 to over $2000 per month. Even the latter seems like too much.

They're the same homes, and the maintenance cost is relatively similar, with maybe a 15% premium in Toronto because of higher pricing for the same work. Let's consider the 3% cost for the $500000 home to be reasonably accurate, at $15000 per year. If we add 15% to that for the Forest Hill home, it's $17250, or $1438 per month.

$17250 is less than even just 1% of the cost of a 2 million dollar home.

So, like I said, in much of Toronto, at the higher end, that 3-5% number is a gross overestimate. I'd say that for single family homes in Toronto, it'd only be close to accurate for entry level homes.

In fact, for a $2 million home in an expensive area of Toronto, 2% would be enough to cover maintenance AND property tax (since the mill rate is less than 1% too). That works out to $40000 per year, or a over $3300 per month. That's being very generous, too.

regarding lawn care, that's up to the individual but still shouldn't discount the cost of doing it yourself with time/labour and equipment purchase/maintenance, etc.
Maybe that number would be considered more accurate if I'm paying myself $100 an hour for lawn care, gardening, and snow shoveling, etc.
 
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I could tell you that at most our maintenance costs account for 1.5% of the value of the property. In most cases, it's less than 1%. This includes repair costs, regular subcontracted maintenance, and required upgrades. Even if you include utilities and property taxes, it'd be in the 2% range.
 
I could tell you that at most our maintenance costs account for 1.5% of the value of the property. In most cases, it's less than 1%. This includes repair costs, regular subcontracted maintenance, and required upgrades. Even if you include utilities and property taxes, it'd be in the 2% range.

Ignore the value of the land and just use the value of the buildings.

A $10k shack on a $10M piece of property is still a $10k shack with the same costs associated as if it was on a $1 piece of land.


3% to 5% of the value of the buildings isn't all that high. A typical $1M property in Toronto has a $300k (or less) building on it. Building value for new construction is around $150/sqft, so that 2000sqft home in the Annex would cost about $1000/month to maintain (4% of 2000 * 150).
 
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Ignore the value of the land and just use the value of the buildings.

A $10k shack on a $10M piece of property is still a $10k shack with the same costs associated as if it was on a $1 piece of land.


3% to 5% of the value of the buildings isn't all that high. A typical $1M property in Toronto has a $300k (or less) building on it. Building value for new construction is around $150/sqft, so that 2000sqft home in the Annex would cost about $1000/month to maintain (4% of 2000 * 150).
I'm not sure that's true, unless you're talking contractor cost. It really depends on the finishes. According to my home appraisal for my insurance from several years ago, the home rebuild cost would be roughly $225/sqft. That means a 2000 square foot home would be roughly $450000 to build. My finishes are higher end than average (eg. hardwood floors, granite in kitchen, nice kitchen and bath fixtures), but they aren't exactly high end.

$150 in Toronto gives you lower end finishes.

I don't think it would cost $1500 per month to maintain a 2000 square foot house like this.
 
I'm not sure that's true, unless you're talking contractor cost. It really depends on the finishes. According to my home appraisal for my insurance from several years ago, the home rebuild cost would be roughly $225/sqft. That means a 2000 square foot home would be roughly $450000 to build. My finishes are higher end than average (eg. hardwood floors, granite in kitchen, nice kitchen and bath fixtures), but they aren't exactly high end.

$150 in Toronto gives you lower end finishes.

I don't think it would cost $1500 per month to maintain a 2000 square foot house like this.

Consider what would happen is a fire breaks out and guts a house. The land still has a value that does not go down in price (unless you are located 5 feet next to the Scarborough Bluffs).
 
I was just saying his $150/sf number may be off, for a lot of houses in Toronto, unless he was talking about contractors' cost. It's apparently possible to build a home for $100/sf, but that's really, really low end. It seems the more common low end number is at $150, but a lot of homes would come in much higher than that, at $200+/sf, esp. if you consider all the upgrades - real cost of building and finishing, not just the initial estimated cost.

Like I said, my home was appraised at $225/sf five years ago by my ank, and a colleague built a house for around that much or perhaps slightly more a few years ago too. We both have above average finishes, but neither of our homes use top end finishes throughout like the really high end homes.
 
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I was just saying his $150/sf number may be off, for a lot of houses in Toronto, unless he was talking about contractors' cost. It's apparently possible to build a home for $100/sf, but that's really, really low end. It seems the more common low end number is at $150, but a lot of homes would come in much higher than that, at $200+/sf, esp. if you consider all the upgrades - real cost of building and finishing, not just the initial estimated cost.

Like I said, my home was appraised at $225/sf five years ago by my ank, and a colleague built a house for around that much or perhaps slightly more a few years ago too. We both have above average finishes, but neither of our homes use top end finishes throughout like the really high end homes.


obviously that's subjective.

not everyone has hardwood flooring, s/s appliances, granite or marble countertops, porcelain tiling, upper mid-range fixtures, etc.

some people have cheap builder's grade finishes.
 
obviously that's subjective.

not everyone has hardwood flooring, s/s appliances, granite or marble countertops, porcelain tiling, upper mid-range fixtures, etc.

some people have cheap builder's grade finishes.
True dat. However, my main overall point is that a basic statement that 3-5% of home (and land) value for maintenance usually doesn't make much sense in the Toronto context. The higher the value of the home (within reason), the lower the percentage of home value required for ongoing maintenance, and homes in Toronto simply cost a lot in general. That 3-5% number might make sense at the low end of the market, particularly outside the core of Toronto, but within Toronto at the mid to higher end with these high home values, the real-world percentages are generally much lower.

Using house construction cost only brings the numbers closer in line, but even then I think some people are underestimating the costs with building a home. Even with lower end finishes, $150 per square foot estimates might be on the low side, because people often make upgrades. I guess it depends what you consider those costs to represent. Is painting your home something other than builders' white a building cost, or ongoing maintenance? I would consider it the former rather than the latter. Painting it again 10 years from now because it's chipping and dirty is maintenance. Similarly is spec'ing granite counters in the kitchen and bathroom high end? I don't think so. I think it's a luxury feature, but one that is now firmly established in the mid-end range - or entry-level luxury as it were - and there is an awful lot of that in Toronto. Furthermore, if anything, there is often less maintenance required for granite than there is for laminate. I'd say the same for hardwood and tile vs. cheap broadloom. Cheap broadloom will need to be replaced way sooner than hardwood or tile.
 
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I'm not sure that's true, unless you're talking contractor cost. It really depends on the finishes. According to my home appraisal for my insurance from several years ago, the home rebuild cost would be roughly $225/sqft. That means a 2000 square foot home would be roughly $450000 to build. My finishes are higher end than average (eg. hardwood floors, granite in kitchen, nice kitchen and bath fixtures), but they aren't exactly high end.

$150 in Toronto gives you lower end finishes.

I don't think it would cost $1500 per month to maintain a 2000 square foot house like this.


According to insurance appraisals, a typical $1M detached single family home of approximately 2,000 sq.ft. in midtown Toronto will have a rebuild cost north of $500,000. Granted there are variances depending on whether you have a garage, a tool shed, what type of siding, whether you have a trampoline in the backyard (no joke), etc. The unit cost of a rebuild would thus fall in the $275+/sq.ft. range and the annual maintenance costs would be somewhere near 2% of the actual building value.
 
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I just realized something that got lost in the conversation. It's totally obvious but I just wanted to reclarify:

Condos are not free from ongoing maintenance costs either for the individual owner, in addition to regular condo fees. Yeah, it might cost many tens of thousands of dollars (in 2012 dollars) for a detached house owner to update his/her kitchen 20 years from now, but then again, it would cost the condo owner the same thing. The bathroom refresh would be the same. Shower fixture cartridges die just as quickly in a condo as they do in a suburban freehold townhouse. Tile grout also gets stained in a condo, not just in bungalows. Same sometimes even goes for some condos' water heaters. Or even HVAC for some townhouse condos.

For example, the AC in my mom's condo keeps tripping the breaker. Assuming it was installed correctly the first time around, it might just be an old and oversensitive breaker. I will swap the breaker myself (to the same type and rating of course), hoping that will solve the problem. I could hire an electrician right off the bat to troubleshoot, but I don't have to for this initial troubleshooting.
 
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The property taxes on a house are much higher than they are for a condo, so although the maintenance fees are higher for a condo, the cost pretty much evens out in the end.
 

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