Alex, Home Buyer in West Los Angeles, Los...

I'm trying to figure out the total cost of owning a condo.

Asked by Alex, West Los Angeles, Los Angeles, CA Wed Jan 16, 2008

Aside from the HOA, property tax (1.25%), and mortgage,what other expenses are there?

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Answers

13
Mike Stone’s answer
I think what Tiffany meant to say was to extend your home warranty after the first year (Seller customarily pays your first year) and to include the optional air conditioning coverage. Average cost is about $300/year.

The average cost of owning a condominium is not really that much different than owning a home. Some people think paying the HOA fee (average is $200 - $400 monthly) is wasted money.

This is not usually true. Typically most of the HOA fees go towards the maintanence and repair of anything on the outside of your unit (roof, stucco, paint, walls, fences, garage doors, etc.) as well as the common areas... asphalt, walkways, hand railing, landscaping, pool and or recreation areas, etc. etc. as well as the basic "master" fire and hazard insurance coverage for all of the units and common areas.

The "master" insurance policy does not cover your personal property, interior upgrades to the unit, or interior liability (slip and fall, etc. inside your front door). Your own insurance agent can provide the extra coverage for this (a condo policy) and can usually be purchased for a nominal fee ($30 monthly on average). It is optional and not required for you to do so

When you own a home, you may not pay for these things monthly...but when it needs a roof, paint, stucco, landscaping, walkways, driveways, garage door, etc. etc. then you have to fork over the cash.

Other than the HOA fee, the condo insurance policy (if you choose), the property tax (1.25% of the purchase price in California), your mortage payment and mortgage insurance (if required) the only other expenses would be maintanence and repairs on the inside of your unit, if any. If you would like to estimate these fees, contact a mortgage lender (I happen to be a mortgage broker as well).

The other agents did a good job advising research into the financial condition of the Homeowners Association, as well as any restrictions......you should get the current budget, by-laws, articles of incorporation, rules and restricitons, CC&R's, as well as copies of any minutes or other announcements from the board of directors during the 12 months preceding your purchase). Beware of any pending litigation the association is involved in, as well as an owner occupied ratio of less than 75% of the units...these can make it difficult to get financing, which in turn can hurt you when you go to sell it as well.

For more info..please contact me at 818-481-8555 Mike Stone
2 votes Thank Flag Link Sat Feb 16, 2008
The answers below cover just about everything. Just one or two items that can result in "gotchas."

You want to make sure that the condo has adequate reserves for major repairs. Otherwise, if something expensive needs repair or replacement (elevators, the roof, the boiler), then you could be hit with a special assessment. That's a one-time charge (or maybe several times, spread out over several months), but can be substantial...often in the hundreds of dollars.

Second, if it's a new condo, watch out for unreasonably low condo fees. The developer wants to sell the condos, so he's going to make it as attractive as possible. And some costs really may not be know until the condos sell out. So you might be told that the condo fees are, let's say, $200. But when the next budgeting year comes around, those fees might go way up, to say $400.

Hope that helps.
0 votes Thank Flag Link Thu Jul 31, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Alex
I suggest meeting with a REaltor and talking about your needs, wants, and goals.
If you are a first time buyer, you no doubt are concerned about what it cost . Sitting down with your Realtor is step one.
Step two is to talk with your CPA and have them explain the tax benefits of homeownership. If you are moving from renting to owning, there are huge changes you can expect, and you should know that the US Tax code is written FOR homeowners.

The scope of this post is too limited, so please take my advice and talk with these professionals. The numbers provided are helpful, but the tax side is so significant that you need to address this as well before you make a decision,
0 votes Thank Flag Link Thu Jul 31, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
I am the broker and owner of Centuryside Real Estate Inc. I am also a State Licensed Real Estate Appraiser and expert witness for Attorneys in court property evaluation cases. I represent you directly, not a part time real estate person or individual who just decided to get a real estate license to fill in the time while performing other home activities.

In this market... suggest buying a home, not condo......
Web Reference: http://www.centuryside.com
0 votes Thank Flag Link Thu Jul 31, 2008
Alex,

If your purchase is going to be an older condo you should be aware of the possibility of assessments for major renovation. These can come in the amount of thousands for things like repaving, pool renovation, plumbing, etc. etc.

Our best advice is to find out what has been done, what is in the future plans, and the reserve fund status.

Good luck,

The "Eckler Team"
Michael Saunders and Company
Venice, Fl 34285
941-408-5363
ecklerteam@comcast.net
0 votes Thank Flag Link Sun Jul 6, 2008
Other than gas and electricity you have the costs covered. HOWEVER -- you should review the HOA docs and financial reports. Questions for the HOA: 1) Is a special assessment expected? 2) What deferred maintenance is expected to be addressed and are there sufficient reserves? 3) When was the building last termite fumed, and is there a contract in place for pest control?

It is really unexpected repairs to the building that may surprise you, and these need to be addressed by a case-by-case basis. I own 4 condos and each Association is a separate animal.
0 votes Thank Flag Link Sun Jul 6, 2008
Don't forget the cost of homeowners insurance which is required by many lenders. Also, depending
upon whether your down payment on the purchase,is less than 20%, your lender may also require that you pay morgage insurance.
0 votes Thank Flag Link Mon Jun 23, 2008
There are quite a few expenses you might not have considered. e mail me and I can give you an estimate based upon your downpayment.purchase price and hoa's
0 votes Thank Flag Link Sun Jun 15, 2008
I think you are right on in knowing what to expect for the most part already. Utilities is kind of an unspoken, whether you purchase or rent you have utilities. Not to say that is not something to consider, I would just imagine you already took that into consideration. Something else to consider is the insurance you will have on a yearly basis. You will want to consider fire insurance, flood insurance, earthquake insurance (for those living in California), as well as a general home owners insurance that can on average cost you about $300 a year. Make sure when you get home owners insurance that you have comprehensive PLUS air conditioning. Trust me it is worth it.

Other than that, you are going to incurr costs in purchasing your condo (i.e. closing costs which include a variety of things).

Hope this helps. If you need any more information or advice, please feel free to contact me. I also can give you a referral for some top agents in your area if necessary.

Sincerely,

Tiffany Mueller
Prudential California Realty
0 votes Thank Flag Link Fri Jan 18, 2008
Alex:

You will still have utility costs and though structure insurance is likely carried by your HOA, you will still want to have contents insurance to protect your belongings and interior appliances, floor, wall and window coverings and other amenities.

You might also want to check the finances of the HOA to see if there are adequate reserves for building and common area maintenance and repairs.

Best wishes!
0 votes Thank Flag Link Fri Jan 18, 2008
Roberta Murp…, Real Estate Pro in San Diego, CA
MVP'08
Contact
HOA fees vary and you want to make sure that when you do buy that condo, there are enough funds in reserves (money set aside for repairs etc) so that when something goes wrong with the common areas of your condo (roof, exterior painting etc.) there is money available, otherwise you can expect to be assessed. Also, it is a good idea here in Southern California to make sure you have earthquake insurance for your unit. I own a condo in West LA and live in the area as well and would be more than happy to answer any questions. Right now there are quite a few condos on the market. Good luck.
Maureen.ross@era.com
Web Reference: http://maureenrosshomes.com
0 votes Thank Flag Link Fri Jan 18, 2008
Hi Alex,

I agree with Ron - add in the utilities (phone, gas and electric) and the interior home owner's insurance coverage. The only other item that you might want to build into your budget is to set aside some funds for special assessments. Prior to purchasing a condo, make sure to review the financial statements of the complex and the minutes of association meetings to see if there are any potential assessments that could be coming up.

Good luck in your condo search!
0 votes Thank Flag Link Wed Jan 16, 2008
Utilities some of which may be included in the HOA fees. A condo owners insurance policy is a good idea too as it covers what the structural coverage of the HOA doesn't like your funiture and personal possessions.
0 votes Thank Flag Link Wed Jan 16, 2008
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