Why Are Downtown Condo Association Fees So High — or So Low?
Why Are Downtown Condo Association Fees So High — or So Low?
Direct answer: For downtown Grand Rapids condo buyers confused by association fees, the fee varies so widely because of what it covers — amenities and utilities — and because every association is a nonprofit looking out for its owners, not a profit source.
First, what the association is
One of the major questions Steve always talks about with clients: why is the association fee so high in this building, or why is it so low in another building? It gets really confusing when you look at each building and what its association fee is.
Please remember: every association is a nonprofit. You are not paying into a profit source for someone else. It is a nonprofit entity, and it is supposed to look out for the best interest of the owners who make up the association.
Amenities drive the fee
Association fees vary so widely because of common elements — which amenities come with the building. If there are amenities like a pool, a health club, big hallways, or any other major thing, you are going to have to pay for a portion of those things in your association fee.
A building with more to maintain charges more. A building with less charges less. That is the trade, not a mystery.
Utilities change the math too
The other thing is obviously utilities. What is covered — is electric covered, is gas covered, is water and sewer covered, is trash covered? All of those things would maybe add up to a higher association fee, but would then lower your monthly costs, because you are not paying for those separately.
So a higher fee is not automatically a worse deal. If the fee covers utilities you would otherwise pay out of pocket, your total monthly cost may be lower.
Choose the fit, not just the number
Each development is unique. Each one has a different association fee, and some have a higher fee and some a lower fee. It really depends on what kind of amenities you want, what you want to pay for on a monthly basis in your association fee, and what you would rather just pay for out of pocket yourself.
So when you are looking at a building, look at the association and see what building is the best fit for you. The right fee is the one that covers the life you want, at a total monthly cost you are comfortable with.
Key takeaways
Every condo association is a nonprofit — you are not paying into a profit source for someone else; it looks out for the owners' best interest.
Association fees vary widely because of common elements and amenities: a pool, health club, big hallways, or other major features raise the fee.
Utilities matter too: electric, gas, water, sewer, and trash covered in the fee raise it but lower your separate monthly costs.
Each development is unique, with a different fee — higher is not automatically worse.
Choose based on fit: what amenities you want, what you want covered monthly, and what you would rather pay out of pocket.
FAQ
Why is one building's association fee so much higher than another's?
Because of amenities and utilities: pools, health clubs, big hallways, and covered electric, gas, water, sewer, and trash all raise the fee — but covered utilities lower what you pay separately.
Is the association making a profit off my fee?
No. Every association is a nonprofit entity, supposed to look out for the best interest of the owners who make up the association.
Should I just pick the building with the lowest fee?
Not on fee alone. It depends on what amenities you want and what you would rather pay monthly in the fee versus out of pocket — the best fit matters more than the lowest number.
Grand Rapids Downtown Condos FAQ Series
How Much Space Do You Need?
Association Fees — you are here
Renting Out a Condo
Downtown Parking
Financing Condos
Repositioning Your Listing
Watch me explain it
Here is an older video of me explaining the process. It might be older, but the info still rings true.
Watch on YouTube: https://www.youtube.com/watch?v=iKihR6xdyoE
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Author: Steve Volkers, Associate Broker, Steve Volkers Group at Five Star Real Estate, Grand Rapids, MI — phone 616-717-2179, stevevolkersgroup.com
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