# Monthly costs for a townhouse versus a house



## GalacticPineapple (Feb 28, 2013)

I'm trying to determine how much value, if any, is in the fees that townhome owners pay versus the monthly costs of a similar-sized house. I hate the fees but would I wind up paying more in a house anyway? Assuming same age, location, building materials, etc.


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## AltaRed (Jun 8, 2009)

Strata owners have to pay more because the property manager has to be paid for their time plus profit. That said, if the strata is large enough to be able to buy services at less cost than a single homeowner, there is an advantage there (but don't bank on it since the property manager has little incentive to cut costs). Lastly, a homeowner may not do all the repair/maintenance that a strata would, and may contribute personal time to it, thereby cutting labour costs. OTOH, a homeowner is likely to incur more costs due to upgrades, nice to haves, etc, etc. that a strata would not undertake. IOW....it depends.


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## jargey3000 (Jan 25, 2011)

....first time I've heard the term "strata" used in real estate... had to google it...hmmmmm...


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## Mukhang pera (Feb 26, 2016)

jargey3000 said:


> ....first time I've heard the term "strata" used in real estate... had to google it...hmmmmm...


Here in BC, it's been in vogue for decades. Going back to the Strata Titles Act in 1966. The act was reincarnated for awhile as the Condominium Act, but each successive government likes to piss away taxpayer money changing the names of all the statutes (and all the related forms, etc.) to show they are somehow different. Even if it's simply a matter of adding or deleting an "s". Thus one government with call it the Strata Title Act; the next will make it the Strata Titles Act; then the Condominium Act; then back to the Strata Title Act. 

Such nonsense is applied to just about all legislation. We have had the Company Act sometimes; sometimes the Companies Act. Right now, the Business Corporations Act. Very useful stuff, huh? Another very important change was renaming the Bulk Sales Act to the Sale of Goods in Bulk Act. I mean, it's important, no doubt, to pay a few public servants $100,000 a year or so to pore over volumes of statutes, to see how each name can be changed in some minuscule and meaningless fashion. Of course, we also see some very important changes from time to time. I mean, labour relations law entered a new era when one government killed off the Labour Relations Board in favour of the Industrial Relations Council. We are now back to the old era with the original name restored by a successor government.

Thanks jargey for the open sesame to airing that pet peeve about government waste. Rather a drop in the bucket of government waste and one reason why I refuse to vote for any of those dolts.


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## Plugging Along (Jan 3, 2011)

A guideline I have used is every $400 in condo fees is equivalent in buying a house for $100000 more. That doesn’t answer your question about will you pay more in a house. It depends on so many factors in the condo such as what is included and how well the condo is managed. 

I think comparing maintenance costs on a condo vs. house is Apple vs oranges


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## kelaa (Apr 5, 2016)

Our townhome association fees are $100 per month. I think about 1/2 of that is spent of grass cutting, fertilizing, watering, and occasional chemical weed treatment, as-needed snow removal, renting a hall for the annual meeting, etc. The rest is banked for roof replacement. For sure lawn maintenance is cheaper as an association than if you were to pay for the service for an individual house. I would say there is very minimal "wastage" or "excess", as our association doesn't have any common property such as gym, pool, pavilion, etc.


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## SlowestR (Jul 17, 2019)

kelaa said:


> Our townhome association fees are $100 per month.


Where are you located? Around here (Kitchener-Waterloo) I believe they are up to $200 ish. I'm going to not go too far out on a limb but in Toronto I can see this being more. Also in a house/townhouse the condo fees will not give you "free" things like cold water or cable tv thus the costs are lower than in a tall building.

You are probably correct that the (say) $50/month that goes towards shoveling/cutting etc could not be beat by a single homeowner. However if your fee was $200 with half going to those things I think the average homeowner especially those with (usually) tiny yards and driveways could do better than that.


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## Jimmy (May 19, 2017)

kelaa said:


> Our townhome association fees are $100 per month. I think about 1/2 of that is spent of grass cutting, fertilizing, watering, and occasional chemical weed treatment, as-needed snow removal, renting a hall for the annual meeting, etc. The rest is banked for roof replacement. For sure lawn maintenance is cheaper as an association than if you were to pay for the service for an individual house. I would say there is very minimal "wastage" or "excess", as our association doesn't have any common property such as gym, pool, pavilion, etc.


This pretty much covers it. It looks to be a wash. In the 905 the fees are ~ $350 for 1400 sq ft townhouse and up (based on size, location and other factors) . 

Roofing is the biggest cost - they set aside a reserve. Just to add to the repair and replacement costs, they basically cover everything outside of the condo. Other costs are: 

Windows and doors
Garage door
Eaves troughs
Foundation repair
Driveway repaving
Attic work
Outdoor electrical outlet replacement
Siding work 
Insurance
etc

One extra cost is the mgmt fee which looks to be ~ 7%. There is likely a saving though on these other items as they are purchasing for a large # of properties vs the individual . Same for services like lawn cutting. You wouldn't need some services like snow removal though if you had your own house.


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## birdman (Feb 12, 2013)

As mentioned above reserves are set aside by some stratas. I believe this is provincial legislation and in BC it is a requirement that the strata establish a Statutory Reserve Account to cover items that will be required to be repaired over the longer term. This report is normally repaired by an engineer or similarly skilled individual. Of course there is a cost to repair this report and as costs for these future repairs normally increase ever year I would expect the reserve expense to homeowners would increase as well. I have a recreational property and our owners waived this requirement which required a 75% approval. I believe the legislation here in BC also requires audited financial statements which again is an extra cost. We waive this as well. While we waive these requirements we normally keep some emergency funds on hand and as and also, when some major repairs are like a roof for 100,000. we start putting a few extra $$ away maybe 5 yrs or so beforehand. Furthermore, any surpluses we may have during the year are put aside for future or unforseen repairs and normally have a $20,000 annual budget for repairs and maintenance. The strata manager, the audited statements, depreciation report and resultant expense, building manager expense, and the contracting out of all repairs/maintenance vs doing it yourself are in my opinion all extra expenses incurred by a strata. As a homeowner, I realize that certainly things need to be maintained and I make a mental note of when these will be done. For example, over the past 10 years we have replaced the roof ($10,000.), new furnace and gas line (10,000.), exterior house painting (6,000). With the exception of our high and large cedar hedge which we have pruned annually (1,000.00) we do the other maintenance and repairs ourselves. Remember that the strata fee repairs are only on the exterior and common property.


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## OptsyEagle (Nov 29, 2009)

This is quite simple. All condo fees paid go towards services for condo owners. So you can tell me if it is really an EXTRA fee. The only exception is the amount of the fee that goes directly to the management company itself, for their services. I would justify that fee against the convenience of not having to get quotes when windows needs to be changed or roofs replaced. Part of the condo fee also goes towards property taxes and insurance that you do not need to cover. You do not need to cover anything outside your unit. Your insurance and property taxes that you pay directly are for those items, inside your unit, only.

That said, the real estate market does not seem to think of it that way. Many do but many consider a condo fee a lost amount of money. They have never done the math or at least never done it correctly. Because of these perceived opinions along with some real ones, there is a relationship between the amount of the condo fee and the difference in price to a house without one. Above it was mentioned at around 20x the annual cost. That is about right. 15 to 25 times. So with a freehold house you are effectively just pre-paying these fees. The only difference is, most likely when the freehold person goes to sell their home, someone else will be happy to pre-pay as well. What this means is that the freehold owner will most likely get this money back, with appreciation, when they sell their home. The condo owner will never see that condo fee money again. That is probably the biggest difference, as I see it.


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## Longtimeago (Aug 8, 2018)

OptsyEagle said:


> This is quite simple. All condo fees paid go towards services for condo owners. So you can tell me if it is really an EXTRA fee. The only exception is the amount of the fee that goes directly to the management company itself, for their services. I would justify that fee against the convenience of not having to get quotes when windows needs to be changed or roofs replaced. Part of the condo fee also goes towards property taxes and insurance that you do not need to cover. You do not need to cover anything outside your unit. Your insurance and property taxes that you pay directly are for those items, inside your unit, only.
> 
> That said, the real estate market does not seem to think of it that way. Many do but many consider a condo fee a lost amount of money. They have never done the math or at least never done it correctly. Because of these perceived opinions along with some real ones, there is a relationship between the amount of the condo fee and the difference in price to a house without one. Above it was mentioned at around 20x the annual cost. That is about right. 15 to 25 times. So with a freehold house you are effectively just pre-paying these fees. The only difference is, most likely when the freehold person goes to sell their home, someone else will be happy to pre-pay as well. What this means is that the freehold owner will most likely get this money back, with appreciation, when they sell their home. The condo owner will never see that condo fee money again. That is probably the biggest difference, as I see it.


A reasonable analysis. It really is apples and oranges though as Plugging Along suggests. While you can make comparisons such as this one by OptsyEagle, it will vary individually. It assumes for example some degree of competence on the part of the management company (condo) and the owner (home owner). For example, a management company might hire an incompetent contractor to do something just as an individual home owner might do. In that case one way would certainly be more financially 'valuable' to you than the other. Another kind of 'value' that you would have trouble putting a 'dollar value' on would be the hassle of having to do things yourself as has been noted.

The only major difference I see as someone who had owned both, is that if you have a good condo board with a good management company vs. one or both being bad. You can end up with condo fees that are higher than they really need to be and that of course means you will be getting poor value for money. Owning your own home removes that possibility and puts it all on your own shoulders. Now the question is how good are you at doing all that needs done vs. someone else? There are plenty of people I have met who would be better off leaving it to others to make decisions rather than themselves. LOL


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## peterk (May 16, 2010)

The problem with a straight numbers comparison is whether you consider your own time for home maintenance as a "cost" and "chore", or as an "investment" and "enjoyable hobby".

Also how much you value privacy and available private outdoor space vs. smaller but serviced outdoor space.

The 20-30% lower interest payments, property taxes, and needed downpayment (money pulled from other investment/savings accounts), certainly gives the townhouse the edge. But then inflation will probably favour the more expensive detached property over the long term.


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## GalacticPineapple (Feb 28, 2013)

OptsyEagle said:


> Above it was mentioned at around 20x the annual cost. That is about right. 15 to 25 times. So with a freehold house you are effectively just pre-paying these fees. The only difference is, most likely when the freehold person goes to sell their home, someone else will be happy to pre-pay as well. What this means is that the freehold owner will most likely get this money back, with appreciation, when they sell their home. The condo owner will never see that condo fee money again. That is probably the biggest difference, as I see it.


I agree with your assessment. I currently pay condo fees and am leaning towards "pre-pay" as you call it for a house simply because I might get that money back later on.


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## Just a Guy (Mar 27, 2012)

Since I technically own a lot of condos as well as freeholds, I can tell you that, most of the time, if you’re property is well run, you’ll see the benefits of the fees. 

Most people who own houses delay upgrades until the last possible moment because they are cheap. Take a look at most condos and they have new windows, new doors, new boilers, new roof, etc. All done within the lifetime of the products. Take a look at older homes, they have curling shingles, original windows and doors, original furnace and hot water tank, etc. Most people don’t look at replacement until it fails in a house. 

A condo, by law, is forced to maintain the property at a certain standard. 

Of course homebuyers aren’t all that educated in construction for the most part, so will happily, but unknowingly, buy a house that needs a lot of upgrades...then proceed to ignore them until they fail. 

If you get on the condo board, you have a lot of control over how the money is spent. Many condos are mismanaged because the board is trying to be cheap and save money like a homeowner, but a proper board can easily get you a good return on investment for your fees. Doing needed repairs, upgrading paint, carpet, and siding, can bring a property up in value. A good management company (tough to find) can negotiate deals and oversee the projects, bringing in experts you may not have thought about (for example, we hire an independent roofing inspector to monitor the roofing company as they install the roof). Saved us a small fortune as the previous roofers caused 3 major floods from leaks due to poor construction. 

Is a condo better? For some people yes, because it forces them to maintain their property which maintains or increases the value. If mismanaged, then probably not. Same for a house, a cheap owner is a cheap owner, one who maintains their property will probably benefit more. There is no “right” answer, there also is no “wrong” answer.


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## GalacticPineapple (Feb 28, 2013)

Just a Guy said:


> Is a condo better? For some people yes, because it forces them to maintain their property which maintains or increases the value. If mismanaged, then probably not. Same for a house, a cheap owner is a cheap owner, one who maintains their property will probably benefit more. There is no “right” answer, there also is no “wrong” answer.


It's interesting that the market seems to ignore lazy homeowners but also discount the work that condo associations put into common property.


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## Just a Guy (Mar 27, 2012)

It’s good for the savvy investor. I can get quality maintained places cheaper than rundown houses. Since I’m interested in cash flow, not capital gains, this can be very important.


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## peterk (May 16, 2010)

GalacticPineapple said:


> It's interesting that the market seems to ignore lazy homeowners but also discount the work that condo associations put into common property.


Ya. A house can be let go to **** for 30 years, and then the owner spends 150k in major renos/updating to modernize and all is forgiven on the market (hard to know I suppose?)

Seems like the public memory of condos is longer too. An old building could do a major reno that updates to great new standards/amenities, and it would still be "that old condo building", while the 50 year old house that has a major reno will get a "so what - it's completely remodeled" pass or even a "they used to build better quality houses back then" pass.


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## Prairie Guy (Oct 30, 2018)

OptsyEagle said:


> This is quite simple. All condo fees paid go towards services for condo owners. So you can tell me if it is really an EXTRA fee. The only exception is the amount of the fee that goes directly to the management company itself, for their services. I would justify that fee against the convenience of not having to get quotes when windows needs to be changed or roofs replaced.


That's true if a homeowner hires out every job...replacing windows, cutting grass, shoveling snow. But if they are capable of doing these things on their own then they are paying extra because someone else has to make a profit.

Most of the people I know that lack DIY skills are still capable enough to cut their own grass and shovel their own driveway.


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## sags (May 15, 2010)

There would be discounts for bulk purchases and installations.

I also wouldn't agree that spending by condo owners is always wasted. Some condos continually improve their shared grounds and the curb appeal of the complex.

There are lots of complexes around here where the units were sold initially for $150,000 years ago and are worth $350,000 today.

They are more attractive today than when they were built because the landscaping has matured.

The price more depends on the location and style of the condos than anything else. Linked home type of condos are worth the most.

After years of owning homes and growing up in a home helping my dad with the maintenance, I tell my son....buy a big beautiful condo and drink coffee while they shovel your snow.

Spend your days working at your job and your nights and weekends working on your home ? My dad did it. I did it. I wouldn't recommend my son to do it.

The main reason we did it was because the option of a nice townhouse condo didn't exist back then. The only other option was a semi-detached home.


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