Next time you wonder why your HOA fees are increasing, or the amount you will pay if you buy a condo, remember this interesting article in the Wall Street Journal’s Mansion section today. Its entitled “The Climbing Cost of Condo Care”, written by Sanette Tanaka.
Tanaka points out that property managers are paying more to keep properties in working order, and that translates into higher homeowner fees. Property managers need to cover the cost of administration and staff, repairs and maintenance, insurance and property taxes, among other things. Those costs have risen about 25% in the last ten years, and 3% from 2011 to 2012.
Here’s a look at the median condo building costs, per unit, in 2012:
• Repair and maintenance: $875.99
• Operating fees: $674.12
• Administration fees: $338.32
• Fixed expenses: $329.17
• Total Expenses: $2,429.58, or a bit over $200 per month.
Fees vary, of course, depending on the amenities, age of the buildings, number of units, and often the size of the owner’s unit.
Replacement reserves are not included above, but are set aside for big long-term projects, like roof, paint, pest control and the like. That takes another $550.46 a year.
And the features attractive to many buyers – recreational space like tennis, swimming, golf courses, Jacuzzis and parking take up the smallest amount, $112.61 per unit per year. (That amount is included in the Repair and Maintenance category, above).
According to Tanaka, what really drives the price up for property managers is increased staffing. Alan Mark, a real estate marketing and sale firm in San Francisco, says: “A lot of developers are positioning their buildings to attract baby boomers. A lot of time that means service, like a full or part-time attended lobby and concierge.”
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