Nov 26

The “Hidden” Cost of Condo Ownership

Call me naive, or just plain dumb, I never considered the, “hidden” costs associated with condo ownership. OK, so maybe they weren’t hidden, but I certainly didn’t think about what might happen if our building suffered serious damage.

I mean we pay our Home Owner Association dues each month (just writing the check makes me cringe, but single family homes in our area are 1 million+ and that wasn’t in our budget), so our condo fees would cover the building’s expenses and emergency expenses right?

WRONG. So wrong! Thanks to the “Super storm” aka hurricane Sandy, I am now intimately acquainted with the term, “assessment”.

So here’s the long of the short of it…our building’s basement flooded, causing 5+ feet of water to submerge all of our electrical boxes, the building’s hot water heater, washer and dryer, and all of the walls of the basement. Fortunately, all of these things were in the basement and we live on the 3rd floor. Unfortunately, since we’re 1/5 owners of the building, fixing the aforementioned items comes directly out of our pockets. To keep our condo fees low- $275 a month, the association didn’t have a big an emergency reserve. As a result the costs to repair everything will be divided by 5, which means one big check to write, right before Christmas, ugg.

We’ve been homeowners for less than a year. Although we love it and feel good about our decision, I am beginning to think that home ownership isn’t as “fun” as I’d imagined. Nobody can plan a natural disaster, but boy are they a money buzz kill.

Are you a homeowner? Are there expenses that took you by surprise during your first year?

Image: Jay Wentworth


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  1. Tackling Our Debt

    That is so scary. As similar story. In our city a huge complex was built in 1990 and wasn’t insulated properly. In 2005 water damage started to appear in the units and around the windows. The blame went to the original builders but the cost to fix it all fell upon the current owners of each condo unit, even though they had a nice reserve. The reserve had been used to put a new roof on. To repair the water damage each condo owner had to come up with $12,000 instantly. It was quite harsh.

    1. studentdebtsurvivor.com

      Ouch. Thankfully we didn’t have to come up with that much money. But it still was a pretty big hit esp. around Christmas.

  2. Mo' Money Mo' Houses

    Would any of your homeowner insurance cover the damage? Or maybe no because it wasn’t in your suite? That sucks, but I’m sure most homeowner’s experience something similar at least once!

    1. studentdebtsurvivor.com

      The flood policy (of the building) is going to cover some of the damage (we think). We just don’t know how much. So we all have to pay up front and then hopefully the money that comes back will go back into the association for other costs and emergencies that come up.

  3. Mrs. Pop @ Planting Our Pennies

    We had a lot of expenses, but none of them were surprises since we had a great home inspection prior to the purchase and didn’t have a natural disaster like you had.

    Does your building have flood coverage? Would it have even helped?

    1. studentdebtsurvivor.com

      We do have flood insurance, but aren’t sure how much it will cover. A lot of people didn’t have flood insurance, so we’re really thankful for that.

  4. femmefrugality

    Oh, wow! I never would have thought of that! I’m so sorry. I hope that the flood insurance covers a good part of it…you’d think it would…

    1. studentdebtsurvivor.com

      Thanks, we’re crossing our fingers!

  5. Holly@ClubThrifty

    Bummer! I’m sorry to hear about your unexpected costs. Yes, we own a home and stuff always creeps up on us. It’s beat to always be prepared financially then it’s not such a big deal!

    1. studentdebtsurvivor.com

      Yup, I agree. We’re really fortunate to have an emergency fund saved up. If we didn’t, I’m not sure what we’d do.

  6. Deacon @ Well Kept Wallet

    Sorry to hear about the flood and the assessment that you’re going to have to fork over. We also live in a condo and we have had two major assessments: replacing the roof and paving the driveway/parking spaces. Thankfully they give us notice well in advance so that we could save up the cash and pay for it without it being a burden. Sounds like you didn’t have that option in your case.

    1. studentdebtsurvivor.com

      Thanks Deacon. Obviously you can’t plan for a natural disaster (esp one we never thought would do so much damage), but we did have a pretty good emergency fun, so it wasn’t too hard of a hit. We’re very thankful our actual unit wasn’t damaged.

  7. Maggie@SquarePennies

    I’m so sorry for you having pay for the damage. Unfortunately, a condo owner is liable for any repairs to the building. A friend of mine had to pay quite a lot for new railings on everyone’s balconies when it was discovered that they were not up to code. Their choice was to either let the entire condo organization go bankrupt, (!) or else cough up their share of the very expensive redo.

    I like the idea of a condo with little maintenance, but the condo organization can vote in purely cosmetic renovations of common areas that you will be assessed for also. It’s not a headache free situation!

    1. studentdebtsurvivor.com

      Oh ouch! Our association is pretty frugal and doesn’t really “splurge” on cosmetic renos from what we’ve been told. Hopefully this is the last hurricane we ever have (or at least the last one of this epic size).

  8. FI Fighter

    Yikes, sorry to hear. Although my my recent encounter with HOA pales in comparison to your situation, I still had a less than pleasant experience with them. They were peeved at my tenant for installing a satellite dish on the roof which they felt made their community look less than desirable. It was a total pain trying to deal with them, and expensive too, since the roof shingles had to be repaired. I’m thinking of going with a single family next time around.

    Take care!

    1. studentdebtsurvivor.com

      Condo associations are a pain in the rear. We’d much rather have a single family, but in our area they really don’t exist. Ours seems pretty reasonable for the most part, but some (sounds like yours) can be pretty strict and ridiculous with their rules.

  9. Daisy @ Add Vodka

    That’s too bad. When we buy a house we’re working super hard to buy a house that we own completely (no strata – or HOA fees as you call it in the US) so while that may make it more expensive overall, it will be worth it to us. I still think you are way ahead by owning your place – you may have some expensive repairs but at least you aren’t throwing money away on rent.

    1. studentdebtsurvivor.com

      Thanks Daisy. We’re definitely really happy and proud to own our own place (well have a mortgage). We would have loved to buy a single family, but it’s really not affordable in our area and we’d have to move to the suburbs to be in our price range. Hoping in a few years when we settle down we’ll be able to move further out of the city, or to a city with cheaper cost of living. I’ll be following your journey through the home buying process (it’s really exciting and really nerve racking).

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