Are you currently shopping for a condo? If so, you’re probably searching for low condo fees. And who can blame you, right? Saving money is always a top priority. However, I want to open your mind to something you may have never considered. Believe it or not, high condo fees may be better than low ones. I know it sounds crazy, but hear me out. In this blog post, I’ll explain why low condo fees are only sometimes the best choice and why you should reconsider your options.
The problem with condo buildings with really low fees is that it’s just a matter of time before they don’t have enough money. And when that happens, you get slapped with a special assessment. This is when the condo building needs to repair or improve, and they need more money to do it. So they go out and collect it from all the different condo owners. Trust me; you don’t want to be hit with a special assessment as it can be costly.
Even if you’re not an expert on building or construction, just start looking at the age of things. If it looks like things need to be repaired or are dilapidated, start to think about what will happen when these things need to be repaired and fixed. In many cases, those low condo fee properties do not have the necessary funds in their reserve account to cover these expenses. This is a huge red flag and should be considered before making your final decision.
I recently saw a condo building that only had about $30,000 in its reserve account. And I know that to put a new roof on this large building will cost about $100,000. If you start to think about that, you’ll realize that the condo association doesn’t have the money despite having these really low condo fees, which seemed great on the surface.
Generally, these higher kinds of fee properties tend to have more money in that reserve account. As a result, they can take on the burden of those expenses when they come up. I get suspicious when the condo fees are lower than normal. I believe that such low condo fees may jeopardize the financial stability of the building and, ultimately, your investment.
It’s no secret that money matters, but sometimes, the convenience of lower payments can come at the cost of long-term stability. It’s important to think beyond the moment and consider the longevity of your investment. So, if you’re shopping for a condo and come across low condo fees, be cautious. Do your research and find out what this low fee entails. Don’t be afraid to ask questions, and remember that the cheapest option isn’t always the best choice. After all, paying a higher condo fee may save you a lot more money in the long run.