The condo lifestyle, with all of the amenities, and the thought of a simpler life (no shoveling snow, or cutting the grass), can be very seducing. A condo can be your first opportunity to finally own some real estate, and with prices that seem more affordable than a single family home, people are jumping on the band wagon. There is one thing that many people are not taking into account. Condo fees!
Many people figure out how much it will cost them for mortgage payments each month based on their down payment and the overall price of the condo, but they don’t take into account the forever rising cost of condo fees. Now if this is an older, more established condo, the condo fees won’t fluctuate too much from year to year, but, if this is a new condo that you are buying from a builder the story changes. It is so important to be aware that the condo fees will most definitely rise after the first year of occupancy, so you have to be prepared financially. You have to make sure that you can afford the extra money that it will cost you to carry your condo each month. Don’t be fooled into thinking that the monthly payment that you are given at the sales office, is the monthly payment that you will continue to pay for the next few years, like a single family home, because it just isn’t so.
When purchasing a condo, figure out the most that you can carry a month, and then find a condo that will fit into your price range, which may turn out to be a smaller suite, or in a different area of the city. Be very careful because you may end up having to sell your condo if you find that after a year or too, your condo fees are no longer affordable.
My advice, don’t be seduced into buying something that you simply cannot afford. I always say that it is better to start small and work your way up. Remember, condo fees are like a “hidden cost”, so make sure you have extra money left over each month to cover the cost of rising condo fees.