Hidden costs when buying condo units

MANILA – Condominiums are becoming preferred real estate investments by today's generation, but buyers should remember not to overlook the hidden costs that investing in condos entail.

Financial adviser Salve Duplito said that condo buyers are busy looking at location, price, and mortgage rates that other hidden costs are often overlooked by most buyers.

“What’s bad about condo fees is that you continue to pay them long after you’ve paid off the condo itself,” she said on ANC’s On The Money.

The range of condominium fees in Metro Manila is between P1,500 per month and P25,000 per quarter or more.

Condo fees depend on the size of the condo unit; what floor it is located; and amenities being maintained; and the nature of the developer.

“A few condo owners I’ve interviewed in well-known developments said on top of their monthly dues, they have been charged once or twice with additional fees for repairs because the reserve funds are inadequate,” said Duplito.

Most common condo fees are the following:

• Association dues
• Membership fees
• Realty tax on your unit
• Share of realty tax on the land where your condo is constructed
• Share of realty tax on common areas
• Parking fees

Duplito warned that if the dues aren’t paid in time, unit owners also get slapped with interest rates that are in some instances higher than credit card charges at 4 percent per month.

“I’m not saying you shouldn’t buy a condominium unit because of the fees, many condo owners are happy with the fees that they pay because it gives them 24-hour security, well-maintained swimming pools and other amenities, among other things,” she said, noting that there are ways to find the best value for money, even in condo fees.

She said finding a good broker is crucial.

“Brokers earn commissions from his transactions with you. The more you pay, the more he gets… Find great brokers who aren’t greedy and are highly moral and ethical,” said Duplito.

She added that it is not always the condo with the lowest fees that are the best buys, so buyers should do due diligence and ask brokers the right questions.

“Expect the broker to provide you with documents that will help you decide whether that investment has a fair list of fees to pay,” she said.