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The Breakdown For Condo Fees

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real-estate-basicsWhether you are hunting for your first home or the next, you will probably want to look at condominiums as an option. They cost less than detached homes generally and there is someone to take care of the chores and upkeep of the building so you don’t have to do it yourself.

All of this comes at a price obviously and that cost is called a homeowners’ association fee or condo owners fee. This monthly bill covers the cost of managing the community. You will need to factor it into the equation of your decision to buy or to make your purchase elsewhere.

The Structure And Purpose Of Condo Fees

The legal term describing condominiums that you may see in documentation is common interest development or CID. The whole point of a condominium is that it is a community that is managed collectively by the homeowners association or HOA.

HOAs usually employ a professional management company to run the day-to-day operations. The fees that go to the management company for your condominium association or HOA what do they cover? There are several factors that account for the monthly homeowners’ association fees that you pay each month for your condo unit or townhome.

Some Services Covered

Here is a list of some of the most common elements of the bill you will pay each month as a member of an HOA:

  • Insurance – For everything outside your unit, you still need a policy of your own to cover the interior of your unit.
  • Pest control – the shared structure of your building requires that there is a holistic approach to fighting the sort of pests that can get up inside it.
  • Lawn and landscaping If you look closely you can tell the difference between condos and rental units by the quality of the yard work.
  • Maintenance and repair – All work on the shared structures and spaces of the community and the shared link to municipal services.

HOAs Wrap It Up And Put A Bow On Top

This list is not exhaustive however when you are looking at condos to buy your realtor should be able to acquire a comprehensive breakdown of what you will be paying and why.

Likewise, once you are settled and living in your condo there should be at least an annual report detailing what your board of directors has spent and what they intend to spend in the next year.

Work Gets Done So You Don’t Have To

HOA fees mean that you don’t have to worry about doing the yard work and yearly upkeep that is essential to keep the property looking good and habitable. The fee that you pay may go up in future years if there is an unexpected expense or just an increase in the cost of management.

In the balance, if you lack the time or inclination to do chores or potter around and work on your home you might find that your HOA fees represent good value and a subscription to membership in your community.

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Trace Richardson has written 638 articles on BankChirp.com

I'm Trace Richardson and am the founder of LeadPress. I’m a licensed California Real Estate broker and a former equities trader previously holding the Series 7, 63, 55 and 24 securities licenses.

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