Last month, I reviewed 30 Toronto condos to adjust the maintenance fee per square foot/month in order to make an apples-to-apples comparison. The average came to be $0.64 per sf/mth.
This month, we’ll take a closer look of the operating costs and complete the maintenance fee trilogy next month with a closer look at the reserve fund.
While it’s imperative to consider maintenance fees when buying a condo, it’s more important to get a sense of where the fees are heading. In order to do that, we need to understand its components: operating costs and reserve fund contributions.
Condo operating costs are related to ongoing building maintenance, management and repair of the day-to-day operations. These include: utilities (gas, hydro, water); contracts (elevators, landscaping, security, housekeeping, fire alarm etc.); repairs and maintenance (cleaning supplies, electrical, plumbing, exterior, general repairs etc.) and general & admin (management, professional fees, telephone, stationary, insurance etc.)
After reviewing 30 condo operating budgets, the approximate breakdown is:
For condos that include hydro as part of its fees, utilities accounted for approximately 45% of total operating costs.
When assessing whether a condo will be able to manage their costs, I look at the total operating costs per unit because this takes into account how well fixed costs can be spread across the unit holders. (You will need to download pictures to see the data below)
I like condos that have relatively low operating costs per unit as this translates into lower monthly maintenance fees.
Lastly, I look at the most recent increase in operating costs to gauge how well the condo manages its costs.
Normally operating costs should increase a little higher than inflation but as you can see from the above, some operating costs are increasing close to 5 times inflation.
Feel free to drop me a line to see how your condo compares.
When we complete the maintenance fee discussion next month, we’ll be able to see if condo unicorns exist which would have low operating costs/unit, low maintenance fees, low increase in operating costs and high reserve funds.
As for Toronto’s real estate market in April, prices increased across all types of housing with new listings up year on year for freehold properties. Feel free to drop me a line if you want more specifics for your neighbourhood.
3 things I’m noodling through:
- Last night’s Raptors vs. 76ers game 7 was EPIC. Provided redemption from 18 years ago. If you missed it, check out the latest sports highlights. Apparently Drake wore a pair of 76ers shorts tonight….somebody send him a bunch of some Bucks gear! #drakecurseisreal
- I don’t consider myself having a green thumb but I’ve learned a lot since needing to undertake the challenges of gardening ourselves. Here is what we’ve been told: wait until mid-May to do start your garden cleanup. Chrysalides still cling to last season’s dried standing plant material. While you may begin to see bumble bees and ground-nesting bees emerge as flowering trees and shrubs burst into bloom, they still need cover during chilly nights. Also in late fall, don’t cut back your plants in your gardens as this will provide extra protection during the winter. This truly fits into my life motto: why do it twice when you only have to do it once.
- I’ve been struggling with neck pain since last July. I’ve had more than 6 RMT sessions since then with negligible improvement. Shen bought me this pillow from Bed of Nails: https://bedofnails.org/. After laying on this pillow for as little as 15 minutes, it’s made a remarkable difference. Not bad for the cost of half an RMT session.
May is finally here and things are starting to brighten up!
If you’re like most people, this is the time of year when you start making plans for the summer. Perhaps you’re considering a vacation to somewhere exotic or adventurous. Maybe you’re just hoping to stay close to home to spend some extra quality time with family and friends.
Whatever your plans are for the next few months, I wish you and your family a wonderful time.
Speaking of a wonderful time, this is also a great time of year for real estate. As you may have already noticed, things start to get a lot more active in the local housing market during spring. There are a wide variety of properties for sale, and a lot of new buyers looking for their next dream home.
So, if you have any questions about what’s happening in the market, be sure to give me a call. I’d be happy to give you an update.