How Much Does a Condo Cost Per Month?

Buying a condo is an amazing option for many homebuyers, especially those looking for lower maintenance and access to amenities.

However, beyond the initial purchase price, owning a condo comes with ongoing monthly costs that must be carefully considered.

These costs can change based on location, size, amenities, and association fees. In this guide, we will break down all the expenses associated with owning a condo to help you understand how much a condo actually costs per month.

Mortgage Payment

Most condo owners' most significant monthly expense is their mortgage payment. This amount depends on factors like the condo’s buying price, the down payment, the interest rate, and the loan term.

For instance, if you purchase a $350,000 condo with a 20% down payment, you would need a mortgage for $280,000.With an interest rate of 6.5% and a 30-year loan term, your estimated monthly payment for principal and interest would be around $1,770.

However, mortgage rates for condos tend to be higher than those for single-family homes due to the shared ownership structure.

Lenders often require higher interest rates or additional fees because condos are considered a slightly riskier investment.

Borrowers may also be required to meet stricter lending requirements, including higher credit scores and lower debt-to-income ratios.

Property Taxes

Property taxes are another essential monthly cost, varying significantly depending on location. On average, U.S. homeowners pay about 1.1% of their property’s assessed value in annual property taxes. A $350,000 condo could mean around $3,850 per year or approximately $320 per month.

However, tax rates can be higher in major cities. For instance, in New York City, property tax rates on condos can be structured differently, leading to higher costs.

Some new condo developments offer tax abatements to attract buyers, but it’s important to check when these abatements expire, as taxes may increase significantly afterward.

Condominium Fees (HOA Fees)

What are condominium fees? Condo owners must pay monthly Homeowners Association (HOA) fees, also known as condominium fees.

These fees include the cost of maintaining shared areas and amenities. The fees also provide for services such as landscaping, security, and building insurance.

You might wonder about the average cost of condo fees. HOA fees vary widely based on the condo community. Nationwide, the median HOA fee is around $290 per month, but in high-end developments, fees can exceed $1,000 per month. 

Factors affecting condo fees include:

• Building age and condition: Older buildings often require higher maintenance costs.

• Amenities: Condos with pools, gyms, or concierge services typically have higher fees.

• Insurance and reserve funds: HOAs must maintain a reserve fund for future repairs and emergencies, which can impact fees.

Before purchasing a condo, buyers should review the HOA’s financial statements to ensure the association is financially stable and not underfunded.

Homeowners Insurance for Condos

Condo owners need homeowners insurance, though it differs from standard home insurance. Condo insurance (HO-6 policy) typically covers the unit’s interior, personal belongings, and liability protection. It does not cover the building’s structure, which is insured by the HOA’s master policy.

On average, condo insurance costs between $300 and $1,000 per year, or approximately $25 to $85 per month.

The price depends on coverage limits, location, and additional protections like flood or earthquake insurance, which may be required in some areas.

Utilities and Maintenance Costs

Unlike single-family homeowners, condo owners may include some utilities in their HOA fees, such as water, sewer, and trash collection. However, electricity, gas, internet, and cable typically remain separate expenses.

Depending on the unit size and location, average monthly utility costs for condos range from $100 to $250. High-rise condos with central heating and cooling may have additional HVAC-related expenses.

Additionally, condo owners are responsible for interior maintenance and repairs. Experts recommend setting aside 1% to 4% of the condo’s value annually for repairs and upkeep.

For a $350,000 condo, this equates to $3,500 to $14,000 per year or $290 to $1,160 per month. Older units often require a higher maintenance budget.

Special Assessments

Special assessments are one-time fees charged to condominium owners for significant repairs or improvements that exceed the HOA’s reserve fund. Examples include major roof repairs, elevator replacements, or structural upgrades.

While not a monthly expense, special assessments can be expensive, sometimes costing thousands of dollars per unit. Buyers should inquire about planned or recent special assessments before purchasing a condo.

Parking and Storage Fees

In some urban areas, parking and storage are not included in the purchase price of a condo and may come with additional monthly fees. Parking spaces in high-demand cities like New York or San Francisco can cost anywhere from $100 to $500 monthly.

If additional storage is needed, fees for private storage units within a condo complex can add another $50 to $200 per month.

Monthly Condo Cost Breakdown 

Let’s calculate the potential monthly cost of a condo priced at $350,000

• Mortgage payment (6.5% rate, 30-year term): $1,770

• Property taxes (1.1% rate): $320

• HOA fees: $400

• Condo insurance: $50

• Utilities and maintenance: $300

• Parking fee: $150

• Total estimated monthly condo cost: $2,990

Conclusion

Owning a condo comes with various monthly expenses beyond just the mortgage payment.

Property taxes, HOA fees, insurance, utilities, maintenance, and potential special assessments all contribute to the total cost of condo ownership.

Understanding these costs is essential for effectively making a well-informed purchasing decision and budgeting.

For those looking to buy a condo, it’s crucial to research the financial health of the HOA, anticipate future costs, and ensure affordability in the long run.

If you’re considering buying a condo and need expert guidance, Mosaic SVC can help. With in-depth market knowledge and tailored financial insights, Mosaic Services ensures buyers make informed decisions that align with their budget and lifestyle.