Are you blindly paying condominium fees? New condo owners should ask the right questions and be conscious of what they’re paying for, according to David Fleming, realtor at Bosley Real Estate.

In an interview with BNN, Fleming provided a few tips on what condo buyers should do to avoid overpaying:

Buy only when fees are steady
According to Fleming, fees are likely to rise in the first couple of years after a new condo development has been built. But after that, condo fees are expected to only go up slightly with inflation. “In my opinion, the best time to buy is either in the second to fifth year, where you’re not brand new, but the fees are safe,” Fleming said. But just like houses, condominiums will need more work over time. Fleming says a good rule of thumb is that older buildings’ fees are going to be more expensive.

Are you really going to use the pool?
First, make sure you’re getting the utilities you need. Then, look at what amenities are included in your condo. If you’re paying for a bowling alley or pool in your condo, but don’t ever use these features, you could save money by living in a condo without those amenities (and fees).

If it sounds too good to be true…
Condo developers set fees low to entice buyers. But years after purchasing their home, many buyers are often disappointed with the realization that it’s just too good to be true. “In the first, second, third year of operations, you being the condo owners and board of directors will take over the books. Then you’re going to realize, ‘Hey, wait a minute, we can’t actually run the building on this low amount’ and then you’ll have to raise fees,” Fleming said.

Condo fees impact resale value
Compare your condo fees with others nearby to figure out if you’re overpaying or underpaying, to stay competitive on the market. Overpaying condo fees can cripple your condo’s resale value. Fleming estimates that appropriate condo fees per square foot are usually in the following ranges:

  • 70 cents territory is average
  • 80 cents territory is high
  • 90 cents is very high
  • Over $1 is massively high, if it’s not a Shangri-La type development

Your condo fees aren’t just for maintenance
Home owners may think that their fees just include the upkeep of their condo, however, there is also a reserve fund. This is essentially a “rainy day fund,” according to Fleming. This portion of condo fees is for larger projects around the condominium, such as fixing the roof, carpets or parking garage. Any replacement renovations or non-routine repairs are included in the reserve fund.            

Watch BNN’s weekly national real estate news program “House Money” every Tuesday at 5:30 p.m. ET (2:30 p.m. ET)