Whether you are looking at a Boston condo as an affordable first home or as a perfect place to downsize, do not forget to check the condo fees. As you start to search for condos in the Boston proper area, you will soon realize the amount you will pay to a condo association varies wildly from one development to another.When you are financing your Boston condo purchase, your lender will include that condo fee in your debt-to-income ratio, which compares your gross monthly income with the minimum payment on all recurring debt. The condo fee — along with your principal, interest, property taxes and homeowner’s insurance — will be part of your housing payment. Some condo buildings are approved for FHA (Federal Housing Administration) financing, and others are not. This is something home buyers, particularly first-time ones, must consider when condo shopping.
What condo fees cover
Among the reasons condo fees vary from one Boston condo building to another are the size and age of the development as well as the amenities and features covered by the fee.
Large developments that pay a management company can have higher fees than a small self-managed building. However, splitting costs between just four or six units can mean condo fees are a bit higher than a building with 10 or 15 units.
Older condos often have higher fees than newer buildings because they need to factor in repair and replacement of common-area heating and air conditioning systems, an elevator or a surface parking lot.
When examining condo fees, it is important to realize you are not making a dollar-for-dollar comparison. While condo association fees typically cover a reserve fund for major repairs, a master insurance policy for the community, maintenance of the development and trash and snow removal, various other things may or may not be covered.
What is an appropriate condo fee?
When comparing Boston condos, you will need to evaluate your budget and determine how much you can afford to pay in fees. Next, you will need to determine whether a low or high condo fee is justified by the condo’s condition and amenities.
A low fee may look good to you, but if it covers very little and is an older condo with deferred maintenance, you can expect to pay a higher fee or even a special assessment in the future. A high fee may seem unappealing, but if it pays for a lot of amenities and/or your utilities, it may be more affordable that you think.
Contact me to set up an appointment to start your Boston condo buying process.
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