Buying

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.

FREEHOLD $600,000

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Downpayment:  $120,000 (assuming 20% down, although you could buy with 5% down)
Mortgage payment:  $2,160/month
Taxes:  $300/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

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Downpayment:  $88,000 (assuming 20% down, although you could buy with 5% down)
Mortgage payment:  $1,584/month
Taxes:  $150/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?

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