Condo Fees vs House Expenses: Which Costs More?

There are many differences between a house and a condominium, and often when we are considering which to purchase, cost plays a big role in the decision-making process. Right off the bat most people would assume that buying a condominium is cheaper than a house, and this might be the case, but let us take a closer look of the costs of condo fees vs house expenses:

Average Condo Fees in Toronto

What is included: Condo corporations can include different items in the common expenses. One corporation’s common condo fee expenses might cover hydro, gas and cable while another might have individually metered units.

How your share is calculated: Often, common expenses will correspond to the square footage of each unit. A larger unit will typically pay a greater amount per month. However, there is no requirement under the Condominium Act for this to be the case. Common expenses are based on a budget that is approved by the corporation’s board of directors.

What you are paying for:

Below are the average condo fees from a typical 300 unit building in Toronto:

Utilities: 32 percent. (If included in the common expenses)
Condo Amenities: 24 percent. The corporation’s contribution to the operating costs of shared facilities such as a gym, pool, meeting room, etc.
Reserve Fund: 18 percent. All condominium corporations are required to have a reserve fund for repairs and common elements. Usually, a corporation will transfer a portion of the monthly maintenance fees to the reserve fund.
Condo Service and Maintenance Contracts: 15 percent. This portion of the fees pays for the corporation’s property manager and cleaning staff as well as regular service contracts for elevator maintenance and repair, HVAC maintenance and repair, window cleaning and any pest control.
Condo Administration Costs: 3 percent. Most of this money goes to towards the insurance that the corporation is required to maintain.
On-site Personnel: 2 percent. This portion is used to pay for the employees or third-party contractors in the building (property managers, cleaning staff, superintendents, etc.)

Some of the expenses are largely out of the corporation’s control (utilities or fixed-price service contracts), while others are variable from year to year, and somewhat at the corporation’s discretion (minor maintenance, repairs). Your fees may change from year to year and this is a major difference between condo fees vs house expenses.

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Buyers of resale condos should look at the budget, major costs in the past, how much money is in the reserve fund and what the plans are for keeping the building maintained. It is easy enough to find out how any one condominium corporation spends its money. Annual audited financial statements are provided to all unit owners before the annual general meeting.

House Expenses

Most of the consistent costs associated with homeownership apply to both condos and houses: utilities and insurance (even if it may be calculated or billed differently), property tax, monthly phone/tv/internet, etc. As a homeowner, you are responsible for repairs (i.e. fixing faulty plumbing), home maintenance (i.e.buying a new furnace), and property upkeep (i.e. landscaping, snow removal).

These expenses can vary from month to month and will range from a minor expense: buying new paint for your front door, to a significant expense: replacing your roof. Home maintenance expenses can amount to between 3–5 percent of your home’s value per year ($1000 – $1,666 per month for a $400,000 home). Some months you may pay less, but other months may require major repairs and you will need to pay more.

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