But one condo expert says investors should not base their buying decisions by solely comparing the average maintenance fees from building to building.
“Though this may be helpful, it’s important to delve deeper and look at the trends,” advised Freedom Malhotra, a sales representative at Kingsway Real Estate Brokerage and founder of Condo Planet.
“How much has the maintenance fees in a particular building gone up over the years? If there have been significant hikes in fees, this may be an indication of mechanical and structural defects, or a mismanagement of reserve funds. Ultimately, every building is unique and a savvy buyer needs to weigh out all the variables.”
The study, published by Condos.ca this week, collected MLS sales figures for Toronto condos
from the past decade.
It confirmed a number of long-held beliefs about condo maintenance fees, including the more amenities, the higher the fees.
“But the ‘worst offenders’ were not the obvious ones,” according to the report. “Pools, for example, only affected fees, on average, by $0.03 per square foot.
“It revealed a number of other surprises, including the true cost of parking and the fact that older doesn’t necessarily mean more expensive when it comes to maintenance.”
One surprising finding from the study was that older buildings don’t typically have higher maintenance fees per square foot, despite this being a widely-held belief among buyers and industry professionals.
In fact, the study found that the average fee of a condo that is around 40 years old is $0.57 per square foot, the same average fee as a five or 10-year-old building.
“I am shocked that older buildings are averaging $0.57 per square foot," said Matt Elkind, a sales representative at The Condo Store. "That seems very low to me.”
The report believes this myth was established because the absolute numbers are often higher with older buildings because units tend to be larger.
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A new 10-year study debunks the myths about condo maintenance fees, offering investors a clearer picture of this lucrative investment option.