New Condo Common Charges
We have been looking at units in some of the new condo developments in the Clinton Hill/Forte Greene area. We currently own a 1br on a high floor in a co-op and pay about $800/mo in maintenance. Our understanding was that condos had much lower common charges. But places like the Isabella and be@schermerhorn for…
We have been looking at units in some of the new condo developments in the Clinton Hill/Forte Greene area. We currently own a 1br on a high floor in a co-op and pay about $800/mo in maintenance. Our understanding was that condos had much lower common charges. But places like the Isabella and be@schermerhorn for example have even higher common charges. For instances, the cc for a 2 br on a low floor with no outdoor space is $755 in the Isabella. Also, the current listing for monthly taxes for the same unit is $35/mo. There is a disclaimer that notes that when the 421a abatement runs out (no date is specified), the taxes will look more like $1000/mo. Are we missing something? Any insight would be appreciated.
You might want to look for those condos built before 2008 which have 25 year 421a benefits. That was a huge benefit for me when I bought. Taxes are pretty much level for 20 years and then rise 20% per year until after 25 year you pay a big tax bill. I’m retired so don’t care as I’ll be in my 80’s when that happens, LOL.
As for budgeting, a “mature” condo that was built a few years ago will have numbers which should be realistic after the shake out period has ended. Doormen, concierge, fitness rooms translate into higher common charges. You have to weigh these things against location, apt. size, view, school district, etc. and decide on what is most important.
I was fortunate, our building was over budgeted. After one year common charges dropped 5% and for two years in a row we were given one month free due to excess reserves.
Good luck!
The amount of the underlying mortgage should be taken into account when working out the market price of a co-op apartment. For example, if you had two identical co-op buildings, one with a mortgage, and one without, then price of apartments in the debt free co-op should be higher. Similarly, in a condo with a healthy reserve fund, apartments should fetch higher prices than a condo with no reserve fund. A debt free coop should be a selling point and the listing agent should make a point of mentioning it. Ditto for condos with healthy reserves.
I often wonder how many people take into account the underlying mortgage for a building when buying a condo-coop.
Our brownstone in BH has no underlying mortgage and we’ve fought to keep it that way and prefer to pay as we go for any capital expenses.
You wouldnt sign a motgage at 3% over market rate so why do people take no interest in buildings that owe 30-40% in building mortgage?
I’ve been in a condo for 4 years, and our charges have gone up just this year – about 6 or 7%. if you don’t want higher cc’s, then look for non-doorman, amenity free places. we did. our common charges are less than half what you mention here, and our place is a 3 bedrm and it’s about 2000 sq feet.
some bldgs want to start out with a reserve – heard that’s what Northside Piers One did, and that they are actually lowering common charges now.
you have to just juggle the info the best you can, and look at what you want to spend monthly.
each bldg is different.
good luck in your search.
First CC in condos are the same with co-op. It covers amenities, insurance, labor, etc. The more you have (especially amenities) the higher it is. With co-op there is one USUAL (not always) big difference – the underlying loan for the land. Usually the monthly payment for that is part of your CC.
Second, the more units you have the lower the CC can be since you spread out the cost to a larger pool of owners.
Our condo building has excellent reserves. The CC was a bit high in its initial year but that end up being a good thing. The reserves are high, we do not see increasing it in the next 2-3 years – we might actually even decrease (though likely as overwhelming majority of the owners rather keep increasing the reserves).
The developers usually low ball the expenses (insurance, labor, etc.), so it is safe to say that common charges will go up as soon as all the units are sold. I bought a place in 2003 (and since sold) and the common charges are more than double now.
If the unit is a conversion, be prepared for the big assessment when the facade starts falling off. Has happened at almost every factory conversion I know of. New buildings from the ground up, not so much of an issue.
The NY tax coffers are going to get a real boost in 2015 or so when all the abatements start to trickle away.
Again, the tax rate without the abatement is in the offering plans so you’ll know upfront what it will cost in 15 years (or 25 depending).
Yes, many people who have bought new developments will be screwed on the taxes someday!!!!!
$12,000 a year for taxes on a 2-bedroom!!!!
As bohuma mentioned, a lot of it is dependent on the services offered. The Isabella for instance is offering a part-time doorman. be@schemerhorn offers a full-time doorman with fitness center, landscaped courtyard ect. It cost money to maintain all that stuff. In the offering plans for these new places they usually show a breakdown of the budget so you can see how your maint is being split up.