The Condo Association Fee Stealth Subsidy
Question: When does a $300,000 condo on the 2nd floor with a view of a parking lot pay the same monthly association fee as a $600,000 top-floor unit with skyline views?
Answer: when both units are the same size, and the condo association fees are determined by square feet.
In fact, that appears to be how most Twin Cities condo’s do things.
Why that method?
My guess (at least): because determining monthly fees based on each unit’s fair market value is much more challenging.
Square Feet vs. Fair Market Value
Even units with the same footprint can differ widely in their finishes, updates and even floor plan.
Too, the only way to really establish fair market value for a given unit is to . . . sell it.
While some condo’s turn over regularly, others can be off the market for decades at a time.
Sounds to me like a good argument for getting the upper floor unit!
P.S.: I’ve got to assume that in markets (e.g., Manhattan) with more and taller condo towers — and more variation in price between the upper and lower floors — that there’s a standard formula for taking into account building location.
Like, a 2% premium per floor.