HONOLULU (HawaiiNewsNow) - On today's Real Estate of Mind - Maintenance Fees.
If you are planning to buy a condo or townhouse, you should get familiar with Maintenance Fees and how they are determined. Scott Larimer, a Realtor Associate from Coldwell Banker Pacific Properties dropped by Sunrise this morning with some helpful tips. Check out the video from his interview and his bullet points below.
When should you consider or take into account Maintenance Fees?
Maintenance Fees come into play when you own a condominium or townhouse. When you get pre qualified with a Mortgage Broker or Loan Officer, make sure you budget for Maintenance Fees which are usually charged monthly. If a Single Family Home is part of a Subdivision Development, it might also have Maintenance Fees.
What is a Maintenance Fee?
As an owner of a condo or townhouse, a Maintenance Fee is your portion of the annual budgeted expenses to operate and maintain the common elements of the building. The expenses covered by your Maintenance Fee will vary from building to building. Most often they include water, sewer, landscaping and utilities for common elements.. like a recreation room. If the building has a security staff or front desk, that would also be paid for out of Maintenance Fees. In some buildings (condotels) Maintenance Fees could also cover each unit's electric, gas, basic cable, even central air conditioning costs.
Maintenance Fees can vary from building to building.. from year to year.
Your Maintenance Fee is based on the size of your condo or townhouse and is typically charged per square foot. In Hawaii, fees can be as low as $0.50 a square foot but could go up to and over $1.00 a square foot. Keep in mind, a lower Maintenance Fee usually means fewer amenities. The cost to run and maintain a swimming pool, hot tub, recreation deck, tennis court and front desk operation would result in higher Maintenance Fees.
Are there any other things I should consider?
When you find the perfect home, carefully review the Condo Documents and the minutes from past Owner Association meetings. Check to see if there are any Special Assessments in place or being discussed. It's better to know these things up front.
Also, take a good look at the annual budget (including financial reserves) to see if the Association is pro-actively forecasting and maintaining the building equipment, structure and finishes. According to Hawaii law, Financial Reserves should be 50% of the annual budget for the building.