How Much Are Condo Fees in Arlington?

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 years 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 head 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 have a negative impact on 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:

  • 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)
  • 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.
  • I limited the data set to one and two bedroom condos and also did not include cooperatives
  • 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
  • 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)
  • 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 there are several factors that 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 Eli@EliResidential.com.

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com. 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.

Reserve Studies Required Every Five Years for Condos/HOAs

Question: How often do Condo Associations and HOA/POAs need to conduct a Reserve Study?

Answer:

Virginia Requires New Studies Every Five Years

In light of the recent condo tragedy in Miami, I thought it would be a good time to remind everybody that Virginia requires Condominium Associations and Home Owner/Property Owner Associations to conduct a new Reserve Study at least once every five years.

In addition to providing valuable financial/budget guidance, Reserve Studies are also an important way to ensure your building/community remains in safe working order and structurally sound.

What is the Purpose of a Reserve Study?

During the Study, an engineer, or team of engineers, will inspect all common elements of the building/community to provide an assessment of current condition, useful life expectancy, and projected cost of repair/replacement. A building inspection includes everything from the elevators, to foundation, to hallway carpet.

After the inspection, the Study team will provide a detailed report of their findings and an assessment of the future financial needs of the Association over the next 30 years to maintain and replace the common elements of the building/community.

In most cases, these annual financial needs are analyzed against the current Reserve Balance (Association’s savings to pay for common maintenance and replacement costs) and the current Reserve Contribution amounts to determine if adjustments need to be made to the contribution levels in future budgets. Accelerating savings for an under-funded Reserve are one of the most common reasons Associations increase dues. If the funding requirement is high enough and the repair/replacement needs are urgent, that is when Associations will consider charging a Special Assessment to fund the Reserves immediately.

Don’t Forget About Presentation

I have reviewed tons of Reserve Study reports over the years and there is a wide range in quality. In my opinion, a quality report should not only be incredibly detailed in the inspection findings, but also as detailed in the presentation of the financial projections/recommendations. It’s also critical that this information be presented in an organized and easily understood format, which is not an easy feat when dealing so much information. If you are helping your Association choose a company to lead the Reserve Study, don’t forget to review reports they’ve produced for other communities so you can see how well they present their findings.

Important for New Buyers Too

In addition to Reserve Studies being important for building maintenance and budgeting, every new Buyer into your community will receive a copy of the Reserve Study (along with a other Association documents) once they’re under contract and has a three-day review period in which time they can void the contract for a refund of their deposit. So having a current and easily understood Reserve Study report is also a critical part of keeping Buyers under contract and the resale market in your community from under-performing.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.Reserve Studies Required Every Five Years for Condos/HOAs