Question: We are finalizing our condo budget for 2022 and wondering if you can share information on what condo fees are elsewhere in Arlington.
Answer: For those unfamiliar with how condo fees are set, they’re a calculation of the next year's projected budget (operating costs, savings contributions, etc) divided by each unit based on a pre-determined ownership percentage (usually based on square footage or bedroom count). The budget is set by the Board, which is made up of condo owners, not by the property management company.
Many condo owners/potential owners have a hard time wrapping their heads around paying condo fees and see it as a loss compared to other property types, but it’s important to understand some of the benefits of condo fees, which I wrote about here in 2018. With that said condo fees that climb too high hurt property values, which I detailed here in 2017.
So let’s take a look at what average condo fees look like around Arlington! Please note the following about the data:
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I don’t include amenities in these numbers because there isn’t a reliable source for amenities in each building and the data that’s in the MLS suffers from a lot of human error (missing or incorrect info)
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The source for the condo fees is property sales data in the MLS so it is limited to what has been sold/offered for sale, not published condo fee data from each building (that doesn’t exist). While this isn’t a 100% accurate picture, it’s a big enough sample size that we can consider these numbers pretty close.
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I limited the data set to one and two-bedroom condos and also did not include cooperatives
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My reference to “buildings” in the 2nd and 3rd cross-sections refers to condo buildings with 5+ floors and “low rise” refers to buildings with four or fewer floors
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In some cases, you will see a year-to-year decrease in condo fees. It’s unlikely that condo fees dropped in Arlington in those years, rather it’s a result of shifts within the data (more sales of condos with lower fees or fewer sales of condos with high fees)
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Fee/SqFt refers to the average monthly condo fee divided by the finished square footage of the unit. It’s a good way to compare the relative value of a building’s fees.
Hopefully, these numbers help Boards and condo owners understand where they fall relative to the rest of the market. Keep in mind that several factors cause buildings to be above or below average including amenities, staffing, historical management of reserves, unit mix (buildings with larger units have fewer owners to spread costs across), and many more.
It's important for each Board to understand how their fees compare to comparable buildings and take a good look at each budget line item to ensure smart spending with proper savings (primarily driven by the Reserve Study). The budget drives fees, fees should not drive the budget.
If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].
If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529. Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.
