The Lowest Condo Fee Isn’t Always the Best Deal
By Paige Kovari | Palm Beach County Realtor
I’m going to say something that probably sounds strange coming from someone who evaluates real estate investments all day:
Sometimes I’d rather pay a $600 HOA than a $300 HOA.
Not because I enjoy paying HOA fees.
I definitely don’t.
And I’m also not saying that a high HOA automatically means a building is financially healthy.
It doesn’t.
But after digging through condo budgets, reserve studies, Milestone Inspections and SIRS reports, I’ve become much less impressed by an artificially low HOA.
Because eventually, somebody has to pay for the building.
Where Does the Money Come From?
A condo building has expenses whether owners like them or not.
The roof eventually needs replacement.
The building needs painting and waterproofing.
Elevators need maintenance.
Fire systems need servicing.
Pools need repairs.
Insurance has to be paid.
Concrete deteriorates.
Plumbing ages.
Mechanical systems wear out.
None of those expenses disappear because the board decides owners don’t want their HOA increased.
They simply get pushed into the future.
And that’s where things can get expensive.
The $300 HOA Can Become a $40,000 Assessment
Imagine an association that should realistically be collecting $600 per month from each owner to operate the property and properly prepare for future repairs.
Instead, the board keeps dues at $300.
Owners are happy.
Nobody wants an HOA increase.
The units may even become easier to sell because buyers love seeing that low monthly number.
But if the association isn’t putting enough money away, the building is essentially accumulating a financial liability.
Eventually, the roof still needs replacing.
The concrete still needs repairing.
The elevators still need work.
And if there isn’t enough money in reserves?
The owners get a special assessment.
That “cheap” HOA suddenly wasn’t very cheap.
I’d Rather Know What I’m Paying
Personally, I would rather own in a building that tells me:
Your HOA is $600 because we’re actually funding the building.
That doesn’t mean I blindly accept the number.
I want to see where the money goes.
Show me the budget.
Show me the reserves.
Show me the SIRS.
Show me the insurance.
Show me the maintenance expenses.
Show me the upcoming projects.
If the association can demonstrate that the money is being used responsibly, I can understand the cost.
What worries me more is a suspiciously low HOA in an aging building with very little money in reserves.
A High HOA Can Be Bad Too
This is important.
I’m not saying:
High HOA = good building.
Some buildings have extremely high HOA fees because they’re inefficiently managed.
Others have expensive amenities, excessive staffing, costly contracts or years of financial problems they’re trying to correct.
That’s why the HOA number by itself tells me almost nothing.
A $900 HOA could be perfectly reasonable.
It could also be terrible.
A $350 HOA could be an incredible deal.
Or it could be a warning sign.
You have to open the documents.
Where Is the Money Going?
When I’m evaluating a condo, I increasingly look at the HOA like I would look at the operating expenses of a business.
What does it actually pay for?
Insurance?
Water?
Cable?
Security?
Management?
Maintenance?
Reserves?
Structural reserves?
If I’m paying $700 or $800 per month but a meaningful portion of that money is going toward expenses I would otherwise have to pay myself — and toward reserves that protect the building long term — that’s very different from simply saying:
“The HOA is $800. That’s expensive.”
Context matters.
Florida Changed the Conversation
SIRS and Milestone Inspection requirements have forced condo associations to confront expenses that some buildings postponed for years.
And I actually think that’s healthy for the market long term.
Painful?
Absolutely.
Some owners have been hit with significant assessments and substantial HOA increases.
But financially, I’d rather know what a building actually costs to maintain than pretend those expenses don’t exist.
The bill eventually comes due.
This Is Changing How I Shop for Condos
Years ago, I probably would have viewed a low HOA as one of the strongest selling points of a condo.
Today, I’m much more cautious.
When I see an unusually low HOA, one of my first thoughts is:
Why is it so low?
And when I see a higher HOA, my question is:
What am I getting for it?
Those are very different questions.
Don’t Buy the HOA Number
This is probably the biggest lesson I can give a condo buyer right now.
Don’t buy the HOA number. Buy the financial health of the building.
Look at the budget.
Look at reserves.
Look at the SIRS.
Look at the Milestone Inspection.
Look at assessments.
Look at insurance.
Look at what major repairs are coming.
Then decide whether the monthly HOA makes sense.
Because the cheapest HOA today can become the most expensive building tomorrow.
And sometimes I’d much rather knowingly pay $600 a month to an association that’s preparing for the future than pay $300 a month to one that’s simply postponing the bill.
Paige Kovari
Palm Beach County Realtor
📞 561-323-5748
Palm Beach County REALTOR®
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