Of course they do! When a buyer evaluates a property, he must factor in the monthly costs of owning a property beyond the monthly mortgage payment. Before a lender will approve a loan, the monthly fees are calculated into the debt ratio to ensure that the buyer will qualify. Even an investor paying cash for a home will look at the monthly fees to calculate his/her Return on Investment as compared to a different property.
I own 2 condos that have been wonderful investments. I have 2 others that are in a community where, when I bought, the prices were low and the fees were reasonable. Within a few years, the fees had increased substantially. The increased condo fees were a result of mismanagement and poor long term decision making by the property management company. Property values stagnated and eventually came down. I convinced the president of the condo association to go with a different property management company and thanks to their better management, the fees have leveled off and have since come back down to a reasonable amount. Property values have begun to rise again and the owners are doing much better.
There are communities where the monthly dues are higher than the mortgage of the home (especially with today’s low interest rates). Sellers must factor this in as well as any upcoming increase in the fees or a special assessment when pricing a home.
Well managed condos with solid reserves and low fees can price their homes higher than comparable listings with higher fees, all things considered.
What is the bottom line? Although there may be a lot of unit owners and the board makes the decisions about the community, everyone has a stake in making sure that sound decisions are made and there is good value for every dollar spent. Your property’s value will depend on it.
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