Inarguably, Toronto houses some of the best condos in the world. If you are on the lookout to live a condominium lifestyle in the city, then you are indeed in the right place. In the current state of the real estate market, buying a condo seems to be the ultimate solution. Young people would instead choose it than buying a house, and even the aging population prefers the life without stairs, driveways to take care of, or the lawns to mow. You may be opting for it because it costs less than owning a house, but even with that, you need to consider Toronto condo fees.
With the monthly maintenance fees that you have to pay as an owner, these can make a significant dent on your budget. For first-time buyers, the concept of these charges might be new and daunting. Many driving factors can affect the total amount. Let’s map out every little detail that you would need to make an informed decision while buying a condo in Toronto.
Toronto Condo Fees: Breaking it Down
If we take a closer look, then the fees you have to pay amounts for the direct share of the cost required to run the building. Therefore, there are a lot of factors that add to the total cost. The utilities available, different amenities, the location, and even the age of the condo play a significant role.
1. Facilities Available
Your building may come with additional security, underground parking facilities, concierge services, fitness centers, pool, and even a rooftop patio and more. With the extra facilities, the cost will factor in your monthly condo fee. You should keep in mind that facilities like underground parking and concierge services are mostly optional. Additionally, there is a concept of a contingency fee in Toronto which is mandatory for every condominium out there.
This amount is kept as reserved funds to be used in case of unexpected expenses like damage to the roof or even flooding. So, to sum up, while purchasing a condo you are required to pay a mandatory fee monthly, which is non-negotiable and covers a broad sphere of expenses. The condominium fees will include the utilities along with the reserve funds and the maintenance charges of the building for all the common areas that you have access to.
To be on the safe side, it’s better to finalize the condo purchase after consulting with your realtor or even with your real estate lawyer. This will help you figure out all that is covered in the charges so you won’t be surprised when any surprise bill pops up at your door.
If you’re thinking to invest in a Toronto condo, then it’s better to do proper research on the management company and developer. Go with the corporation with a good reputation, your real estate lawyer will help you figure out the dark spots. Even with that, it’s just a fact that the maintenance costs will proportionally increase with the rate of inflation.
However, the expenses should be used for the real costs of operations of the building. Many buyers forget to realize that these are to be paid monthly and are not fixed as it can change according to the board’s discretion. If you consider the increasing costs, you may want to go for a low maintenance condo as the price will most probably increase with time.
There are a lot of buyers in Toronto who look for condos with lower condo maintenance fees to manage their mortgage amount. In some cases, the cost of the whole unit may be reduced to maintain the said charges.
2. Size and Age of the Condo Building
The size of the condo building can make a significant dent as well. If two similar structures require a roof repair, irrespective of the floors, it will need the same cost.
The age of the building factors in a lot in the maintenance fees. Newer buildings have low charges while older buildings will require a lot more attention in maintaining it as compared to more modern buildings. The cost of renovation will be another factor to add to the expenses. For example, if the main entrance requires re-building, it will be added on to your monthly fees as it stands to be a shared space for condo owners.
Newer buildings are not an exception to maintenance fees. With the rise in competition in the real estate business, many condominiums in Toronto are using low-grade materials for construction. This runs with the agenda to cut corners in the industry ranking. There are many assessments to be made when it comes to choosing a new or old condo establishment.
The overall costs of repair and maintenance of the common spaces and elements can be balanced with more residents along with the units. Although with the increase in the number of residents, the wear and tear rate might increase as well.
3. The Condo Building’s Status Certificate
Getting a status certificate of the building you are going for could prove to be very beneficial. This offers you with all the necessary information about the financial state of the corporation.
Additionally, it will also include the total budget along with details on reserve funds, contract of the management, and all the legal matters it has faced. Essentially, it provides information about Toronto’s current condo maintenance fees along with an estimate for its increase in the future.
4. Other Fees to Consider
Depending on the corporation, the expenses may vary according to the different items. The standard fees in Toronto may cover the gas, hydro, and cable connection in one condo whereas the other may have metered units for everything. It’s essential to make proper research on its type and how they distribute their costs on the facilities offered.
The standard expense of condominium fees can be calculated depending on the square footage of each unit provided.
With the many factors playing a significant role in your condo monthly fees, it can be tedious to calculate the exact estimate of costs involved. In Toronto, the average price of condominium charges comes to be about $0.50 per square foot and can range up to $1.00 and higher. With a larger unit, the monthly costs will be more. However, there is no upper cap limit for the expenses that you have to pay monthly as the budget costs are decided by the board of directors of the condo corporation.
However, the maintenance fees are a concern for every homeowner. Mainly, it manages to cover a lot of condo expenses from damages, repairs, and a lot of other requirements. Even as a regular house owner in Toronto, the cost can vary a lot depending on the destruction of the condition. Along with that, there may be some cases where you may require immediate repair. The unexpected expenses stand to surprise you the most, and this can essentially hit you with a massive bill.
Within the low supply and high increase in demand, the average cost of the resale of condominiums in Toronto rose from $510,000 to about $558,000 from last year. The implications were clear that to afford a condo; homebuyers would need to have an income of a minimum $100,000. This is order to fulfill all the lending standards required for gross debt service ratios. Furthermore, it comes with tough regulations for mortgage qualification.
Its stability depends on how the condo board manages the maintenance expenses and budgets altogether. At times, the cost might soar up which could won’t be affordable by homeowners and in that scenario, some even thinking of selling.
According to a recent study, the average condo fee in Toronto buildings spiked with 2.5 percent from two years. If we take into consideration a 594 square foot property, then the average maintenance costs come to be about $386.60 in case of a one bedroom apartment. It calculated from 984 buildings in the last year happened to be about $620.02 for a 956 square foot of a two-bedroom unit. The standard fees stood at about $881.20 monthly.
Additionally, with more facilities in the building, expect the highest condo fees in Toronto. These included water, heat, air conditioning, and connection for hydro. Necessarily, if you pay for all these elements separately, you might be subjected to a much larger bill.
So, Are Condo Fees in Toronto Increasing?
Ultimately, to get a proper estimate of the monthly condo maintenance fees in the city, you may need to put aside some time to research into your purchase. Knowing how much are condo fees in Toronto can be confusing but the thing is, they are indeed INCREASING. Being a homeowner comes with many risks, but with a thorough evaluation of the corporation and included facilities, you can make an informed decision to move ahead with your purchase.
We hope that we helped in making a detailed estimate of all the factors that make up the fees for condos in Toronto.