We have a client right now who has been searching for freehold townhouses with NO CONDO FEES.
“There’s no way I would EVER pay condo fees. What a rip-off!”
We hear that language all the time. But if you examine what condo fees include – exterior maintenance, including roofs and windows in some cases, road maintenance, lawn care and monthly water bills – it doesn’t seem as bad. Right?
But still… most people have an aversion to the condo fees.
Let’s have a look at the costs. Right now, you can buy a freehold townhouse for about $600,000. The equivalent value for a condo townhouse might float around the $440,000 range with an average of $350/month in fees in Milton. Both houses would provide three-bedrooms, similar size, a functional basement and a smallish backyard.
Let’s have a closer look at the two expenses that REALLY matter: how much you need UPFRONT, and how much ONGOING, and we’ll see where that takes us.
Downpayment: $120,000 (assuming 20% down, although you could buy with 5% down)
Mortgage payment: $2,160/month
Condo fees: $0
TOTAL PER MONTH: $2,460 + utilities
TOTAL UP FRONT: $132,000 (with 2% closing costs)
Now let’s look at the condo townhouse option…
CONDO TOWNHOUSE $440,000
Downpayment: $88,000 (assuming 20% down, although you could buy with 5% down)
Mortgage payment: $1,584/month
Condo fees: $350/month (includes water)
TOTAL PER MONTH: $2,084 + utilities
TOTAL UP FRONT: $97,000
Now we’re talking! You save a total of $35,000 in up-front expenses, and a little less than $400 per month. Over the next 25 years, you would save $112,800 by buying a condo townhouse, including all those extra monthly condo fees.
That certainly makes it worth considering, don’t you think?