If you own a condominium unit in Singapore, you will sooner or later come across the topic of condo maintenance fees.
Condominiums are often described as secondary residences for some homeowners and landlords. But they’re also more than just another property type; they are an investment and a means of accumulating wealth too.
After all, what’s the point of investing in an expensive piece of real estate if you can’t make money from it?
Similar to renting out your home, selling your condo is another way of getting cash from your real estate property without having to deal with any repairs and maintenance costs.
Read on to learn more about what condo maintenance fees are, how much they cost and if there are any ways to reduce them.
What are condo maintenance fees?
When it comes to the monthly service charge for a private condo, there is no one-size-fits-all answer. This figure is determined based on a variety of factors, such as the size of the condo and the amenities offered. In general, though, you can expect to pay anywhere from $300 to $700 per month.
Condominium maintenance fees are annual fees that are charged by the building management company to provide services like security, cleaning and landscaping.
These fees go towards the upkeep of the common areas of your condo unit such as lobbies, staircases, elevators and swimming pools.
Condo maintenance fees can also be used for administrative expenses like electricity or water bills and insurance costs.
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How much does a condo maintenance fee cost?
The average fees that condo owners in Singapore pay are usually around $400 a month.
This is because buildings must have a certain amount of amenities, security and other factors that need to be taken into account when the building’s owner decides on a maintenance fee.
Some smaller units will have lower fees while larger units may have more expensive fees, depending on the size and number of rooms.
At any rate, you can expect to pay anywhere between $300-800 a month.
Can you avoid condo maintenance fees?
The answer is no. There is no way to avoid condo maintenance fees entirely, but you can reduce them by either renting out your unit or selling it. If you don’t want to sell your property and continue to rent it out, then you’ll have to bear the increasing maintenance costs yourself.
Singapore condo owners pay $2.5 million in annual condo fees
If you own a condominium unit in Singapore, then you’re not only the owner of that expensive piece of real estate; you also have certain responsibilities and obligations as an owner.
As such, every year, owners are required to pay a hefty amount in maintenance fees, which can be quite expensive if you own a large property (e.g., more than four units). According to figures from 2016, the average yearly fee paid by Singapore condo owners was $2.5 million per annum.
Things to know before you buy a condominium unit
When buying a condo unit, it’s important to understand what you are getting into. Condominium units come with the maintenance fees and other expenses that go along with owning property in Singapore.
The high cost of these fees is due to the fact that they cover the costs of maintaining your building, such as cleaning, landscaping, security and even your private swimming pool.
According to PropertyGuru.com.sg, condo maintenance fees are typically charged every year as a lump sum so you could be paying this fee for 10 years or more if you buy a long-term lease unit.
If you own a long-term lease condo unit, expect your maintenance fee to increase by at least S$300 per annum.
Buying tips for prospective buyers
When it comes to buying a condo maintenance fee is a kind of regular fee you pay in order to keep the maintenance of your condo. Always check the condo’s annual maintenance fee with your bank or the bank that holds your mortgage.
If you have your own, you can use the same bank as your mortgagee. This is because, during the time of buying a condo, the bank checks if your monthly income is enough to cover the expense of condo maintenance fee. If you don’t have a job yet or if you don’t have a stable income, it might be a little hard to buy a condo.
For example, if the maintenance fee is close to $500 SGD per month and your mortgage payment is $2,800 SGD per month, the condo may not be so attractive. After 10 years, the expense would have grown to almost $60,000.
So A condo maintenance fee is an important part of owning a condominium and it’s important to be aware of the different fees that are applicable to each building.
Below are some tips on how to avoid getting scammed when purchasing a condo with a maintenance fee:
1. Always ask for a copy of the condominium’s policy booklet – This will include details on the applicable fees, which you can use as a guide when negotiating the price of the maintenance fee.
2. Ask about any special conditions or restrictions – Some buildings may have specific conditions or restrictions pertaining to the payment or use of the maintenance fee, so it’s important to inquire about these before making any commitments.
3. Verify the price – Make sure that the price you’re being quoted for the maintenance fee is actually applicable to the building you’re interested in. Many scam artists will try to charge higher fees than what is actually required in order to swindle unsuspecting buyers.
4. Do your research – Make sure you do your research before making any commitments, as scammers often operate in stealth mode and may not provide all of the necessary information upfront. Avoid making any decisions until you have all of the information you need, and don’t let yourself be pressured into making a fast decision – that’s how scams are usually executed.
Selling tips for stakeholders in your condominium unit
One of the biggest financial concerns of owning a condo unit is the maintenance cost, which can be quite high. In fact, one-third of homeowners in Singapore have to take care of condo maintenance fees and upkeep themselves.
But there are ways to reduce these costs and make your condo unit more appealing to potential buyers.
If your property is still in good condition, you likely won’t suffer any loss in appeal when it comes time to sell your unit.
First and foremost, you should keep your condo clean and tidy at all times. There are also many things that can be done internally to avoid wasting money on unnecessary repairs.
Use a humidifier for example; it will save you a lot in energy bills. Similarly, using fans can also help lower energy consumption as well as improving air quality inside the home.
Condominiums are one of the most popular investment options in Singapore. With the economic climate being what it is, there is a high demand for them. And if you’re looking for a place to invest, a condo unit is probably your best option.
Condo maintenance fees are set by the condo board and are usually charged quarterly or yearly. They cover costs such as property management fees, management fees for strata reserves funds, general maintenance (like carpets and painting), HOA dues, general repairs and replacements and landscaping services. To find out how much these fees cost on an individual level, check the various forms that you’ll receive from your condo board.