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When it comes to condos, maintenance fees are a heated topic. No one wants to pay more than they have to for maintenance.  We all know someone thinking about purchasing a condo. It is a real estate stepping stone for many young homeowners, they can be excellent investments for those who travel and they are a real estate staple for downsizers.

Through website, I have acquired some accurate stats and facts that will bust some of the myths that exist around condo fees.
The average maintenance fee in Toronto costs $0.59 per square foot.

On average parking will add an additional $43 per month and a locker will add an additional $15 per month to the monthly maintenance fee.

Often when maintenance fees are considered “low” it is usually because the monthly fee excludes heat and hydro.

You don’t necessarily have to trade off low fees for amenities. As an example, Shangri-la has hotel style amenities and the maintenance fee is only $0.56 per square foot. (below the average in Toronto)

It is perceived that older buildings cost more to maintain. In reality these buildings often have higher fees because the suites are larger (fees are priced by square foot)

Newer condo buildings fees increase substantially faster than average in the first 3 years after completion, compared to the overall condo market. Builders are aware buyers want low fees. The estimated cost per square foot is often under what is feasible to properly run a building. As the condo corporation takes over they realise quickly that the monthly fee has to be adjusted according to costs. The steady increase in the first 3 year could be for a variety of reasons such as increase in utility costs. Builders advertise estimated price per square foot 5 years before completion, inflation costs alone add up over a 5 year time span. Also, condo corporations are required to establishing a base for the reserve fund right away.

Everyone gets a little nervous about special assessments. I get it, no one likes a surprise, but they are not necessarily a bad thing. It can be argued that it is better to request a 1 time only lump sum, then to gradually keep increasing monthly fees.

Monthly maintenance fees have a major impact on resale. Toy Factory Lofts, who have reduced their maintenance fees by 30% over the last 4 years, has seen a rate of increased property value that is out pacing similar buildings in the same area.

Heat, hydro, water account for 40-50% of building operating costs.  Services, such as cleaners, concierge, general maintenance can account for as much as 25%. Contribution to the reserve fund, management, insurance, etc make up the remaining costs.

A good fiscally responsible condo board can make a difference when it comes to fees. Condo owners need to be invested in their properties, taking an active roll may be beneficial to your fees and upon resale. The provincial government is even considering mandatory education for those managing condo and board members as an add measure to protect condo owners.

Every condo building is different. From services/amenities offered, utilities included, square footage of suites, the inclusion of parking or locker, the fees between different units and buildings can vary significantly. A quick browse of an mls listing on does not provide all the information necessary to understand the monthly fees involved in condo ownership. If you ever have questions about total monthly costs for a specific unit, I would be happy to guide you through what is included, as well as, all the extras.

How much do you figure a parking space is worth to you, each month?

There’s some math involved, and perhaps it only makes the difference of a few dollars, but let’s take a look at the numbers…

Let’s assume that a parking space in a downtown Toronto condo is worth $30,000.  Some are more, some are less, but let’s just assume we’re looking at a $529,000 condo without parking, that would cost $559,000 with parking.

Assuming a 5-year-fixed rate, 25-year amortization, at 3.09%, it would cost approximately $143.36 per month to carry that $30,000.  If the parking space cost $35,000, it would cost $167.26 to carry that cost.

So what does the average parking space rent for in downtown? $150?  Maybe as low as $100 or as high as $200?

If you do the math, you see that there isn’t a huge difference between the cost to rent a parking space, and the cost associated with actually owning a condo with parking.

I find that the cost isn’t a monetary one, but rather a psychological one for the buyer.

Some buyers who don’t even have a car say, “I still want to own a condo with parking,” even if they’re losing money each month carrying $143.36 in mortgage cost for a space that only rents out for $120, and is likely vacant 1-2 months per year as they scramble to find a lessee.

Other buyers who have a car might not care in the slightest if the parking space is owned or leased, so long as they have a place to park their cute little Prius each and every night.

The cost can either be up-front, or each month, but in the end, the buyer is likely paying around the same.

This brings me to the subject of maintenance fees, and how high-fees can actually lower the price of a unit beyond what is otherwise reasonable.

Well, I’m interested to know just how much those high maintenance fees affect the sale price, and ultimately if it makes more sense to:

a) Pay a higher price for the condo, and have lower fees
b) Pay a low-low price for the unit, and have astronomical fees

So let’s assume that this 1,236 square foot condo with $1225.87 monthly fees instead had fees of “only” $865.20.

Now I know that $865.20 still sounds like a very high number to you, but keep in mind – this is based on square footage!  Every condo in the city (well not every condo, since buildings like 287 Richmond have $400 fees for each unit, regardless of size…) bases its monthly maintenance fees on square footage, so this is the norm.

$865.20 is based on $0.70 per square foot, which as per above is sort of “getting pricey” but not quite expensive.

So if this 1,236 square foot unit had $0.70 per square foot maintenance fees, how much would you expect to pay?

The fact that it sold for $405,000 in the first place is outrageous.  Where else would you see such a low price per square foot?

So I ask again – how much would you expect to pay for this 1,236 square foot unit if it had maintenance fees of $865.20 ($0.70/sqft)?

How about $499,000?  Is that reasonable?  Actually, I think that’s fantastic!  That’s still only $404/sqft!

How about $549,000?  That’s still great value!  $549,000 for a 1,236 square foot unit in downtown Toronto?  Count me IN!  That’s still only $444/sqft, and you might argue that you could go higher.

In fact, if this unit had maintenance fees of, say, $741.60, or only $0.60 per square foot, what’s to stop us from using a $500/sqft price estimate?  That would put this unit at $618,000.

But why don’t we get crazy here and throw both together – the low $0.60 per square foot maintenance fees, AND the $444/sqft price.

So that leaves me with this question: where do you see more value?

a) A 1,236 square foot unit for $549,000, with monthly fees of $741.60
b) A 1,236 square foot unit for $405,000, with monthly fees of $1,225.87

You’d probably choose the second one, right?  If you’re following the math, you would.

But in practice, nobody would choose the second one, even if it makes financial sense.

Option (a) has monthly fees that are $484.27 lower than option (a).  That’s $5,811.24 per year, meaning you could live there for 25 years before the purchase price of (a) vs (b) is offset.

And if we used the more reasonable numbers (like monthly fees of $865.20), you’d be living there for 33 years before calling it even.

But as much financial sense as option (b) makes, there’s not a buyer out there that would want a condo with fees of $1,225.87 per month.  Even if it’s a great “deal,” it’s almost unsellable to me.

None of my buyers would ever look at this unit, even at $405,000.

I might explain, “If you can handle the extra $484.27 per month in fees, it’s going to save you $144,000!  You could stay there for five years, spend an additional $29,056 in monthly fees, and save $144,000 on the purchase price!”

But the mind of a buyer just wouldn’t allow it.  It still comes down to, “I don’t want to pay $1,225.87 per month, every month, plus hydro.”

And the savvy buyers will ask, “As good as this sounds, and as great as this $144,000 ‘savings’ would be, how hard is it going to be to sell in five years?”

Well-said, Mr. Buyer.  Well said…

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