"Condo fees these days seem ridiculously high," a client said to me the other day. We were looking at condos on the Big Island
at both Waikoloa Beach Resort and at the Mauna Lani Beach Resort.
Condo fees up, up and away
Condo Fee Sticker Shock
Condo fees at the complexes, in general, have a range between $800 and $1300
... can that be right? Can that be justified? Let's take this condo I am selling for example at Mauna Lani Fairways at the Mauna Lani Beach Resort.
The condo fees are $1245 a month.
As my buyer client said to me "That is a lot of money for nothing!" And that is why I had to write this blog about condo fees. They cover much more than nothing.
Let's take a look...
Condo living at Mauna Lani Fairways (MLS 622612)
What Condo Fees Cover
So what does that all add up to??
- Primarily, the fees cover insurance for hazard damage from flood, fire, hurricane, etc.
- Next, they cover the fees to maintain the landscaping, the pool, the driveways, the gate, the gym, etc.
- And they cover things like replacing the roof, painting the outside of the building
- And we are not done yet as they cover the trash, the water bill, the pest control
- And you get a little bit more with basic cable and high-speed internet.
Condo Fees Really Add Up
If you had your own home, here is a sample of what those costs could look like:
- Insurance - based on my own flood, fire, and hazard - about $200 a month
- Pool Maintenance - $100 a week if used regularly, and $2o0 a month if the pool is not used much.
- Yard Service - if you have a yard with plants and a lawn - it is about $100 a week - let's pretend that you mow the lawn and do most of your yard work - you still need someone to come - let's call it half at $200 a month
- Gym Maintenance - well, let's just call it gym membership - $30 a month seem fair?
- Road and Gate Maintenance - well - your house would have a driveway - so let's pretend you never have to repair it. And if you have a gate to your house, let's pretend you only maintain it once a year for a checkup. Let's call that service call for your gate $360 or about $30 a month. Seem reasonable?
- Roof Repair - I know you might say your roof is fine, but a roof can be about $20. You'll have to fix it and either that is a one time cost or you are setting aside $100 a month for those 15 to 20 years.
- Savings for Unexpected Repairs - $100 a month
- Trash Service - $50 a month
- Pest Control - $50 a month
- Basic Cable - $50 a month
- Internet - $50 a month
- Water - $100 for your home and another $100 for your pool (at least)
Managing all of those vendors, well, I'm not putting a cost on it, but at the condo, someone is doing all of that management for you. Let's just call that cost a freebie for now...
So let's see how this all added up (with barely using your pool and you doing a bunch of yard work and someone else managing all your vendors):
$200 + $200 + $200 + $30 + $30 + $100 + $100 + $50 +$50 +$50 +$50 + $200 = $1260
I didn't even include painting and upkeep of the outside of the building! I don't think I am pushing it with these costs, but please let me know if you think so.
Condo fees are similar to actual costs of owning a single family rgesidence
Are Condo Fees Worth It?
Suddenly, that $1245 number starts to make sense. If you look at condo fees a little deeper, the sticker shock starts to go away and paying the condo fees starts to seem more reasonable than ridiculous. If you see it differently, feel free to comment below.