The other costs that come with buying a condo

Key takeaways

• In addition to monthly dues, condo owners may face special assessments, rising fees and out-of-pocket expenses for utilities, insurance and interior repairs. 
• Reviewing association financials, meeting minutes and reserve studies can flag potential fee increases, major repairs and whether the building is adequately funded. 
• While condo fees cover shared expenses, residents still need to budget for in-unit repairs, insurance and variable costs like utilities and property taxes, which can fluctuate over time. 

Like owners of single-family homes, condo residents typically finance their purchase with a mortgage and make monthly payments. But owning a condo also comes with additional costs.

A condo homeowner association may charge special assessments to cover unexpected expenses, including:

• Emergency repairs 
• Legal costs 
• Budget shortfalls 
• Major capital improvements, such as a new roof 

These fees are separate from monthly condo dues and are often one-time charges. Payment options may include a lump sum, installments or financing.Review the condo association’s financials before buying. Look for:

• A history of special assessments 
• Whether fees regularly cover expenses 
• Meeting minutes that signal upcoming repairs or deferred maintenance 

Condo owners pay monthly dues into a shared fund managed by the association. These fees cover:

• Trash removal 
• Landscaping 
• Window washing 
• Recycling 
• Maintenance and upgrades to common areas and amenities 

Boards can raise fees to keep up with inflation or prepare for future repairs, typically through a vote. Meeting minutes may indicate potential increases. If not, review the building’s reserve study — a long-term report, often covering 30 years, that outlines expected major repairs and improvements.

Parking may come at an additional cost. Buildings typically offer:

• Common parking: Access to any open spot 
  
• Assigned parking: A designated space, usually at a higher cost 

While condo fees cover building upkeep, owners are responsible for repairs to their unit. That includes items such as:

• Appliances 
• Fixtures 
• Interior plumbing 

Ownership boundaries are defined in the condominium declaration or master deed. Real estate agents often recommend setting aside 1% of the unit’s value annually for repairs.

• Example: A $350,000 unit → $3,500 per year 

Condo fees may cover some utilities, such as:

• Trash collection 
• Water or sewer 

But owners may still pay separately for:

• Electricity
• Gas
• Internet
• Cable

Costs vary based on usage and local service competition. Buyers should also confirm whether heating and cooling are included in condo fees or billed separately.

The condo association carries a master policy covering the building and shared areas. Individual owners must carry their own insurance for their unit.

Policies can be paid:

• Monthly through an escrow account tied to the mortgage 
• Directly out of pocket 

Costs vary based on unit size and location.

Property taxes vary by location and are often paid monthly through escrow. Local governments determine taxes by:

• Assessing the value of the property 
• Applying a tax rate to that value 

Assessments may occur annually or less frequently, depending on the jurisdiction. When property values rise quickly, governments may lower tax rates or reassess more often to soften the impact.
The tax is based on the value of a property, but not necessarily all of it. Many states assess only a portion of that value, providing what’s often called a “homestead exemption” on the rest. The exemption varies by state; in recent years, many states have increased the exemption because of rapidly rising property values.

More on this topic:

• What is a condominium?
• Buying a condo in 10 steps
• How to find a real estate agent for a condo purchase
• What condo buyers need to know about appraisals
• Condo, co-op, townhouse: Find what works best for you

This story was updated on May 20.