Many times we talk about how the prices of our homes are rising or falling but what are the big things that affect our daily cash output? Food is getting more expensive because of the gas it takes to deliver the food to the markets. Wheat costs are up and hurting bakeries. Some small businesses in Coolidge Corner have closed recently because commercial leases are going up. This is all bad news, but yet we tend to focus more on the "value" of our home. There are only three times where the "value" means anything to us. First, when we buy, second when we try to use the equity for something, and third when we sell. Yet, in Brookline we're looking at a big vote in 6 days which will determine how much our property tax can be raised.
As we evaluate a purchase price for a condo we need to look at the payments which are due monthly. First, we all know about the mortgage payment, but what is in it? There's the obvious principle and interest payment (unless you are Interest Only). There is also the required property tax payment which most mortgage companies pay directly. Some people still have mortgage insurance they owe because of small down payments at the time of purchase. Last but not least is the condo fee. Normally these condo fees include heat, hot water, master insurance payments, exterior maintenance and landscaping (snow removal) and some sort of rubbish removal fee. Some condos have individually metered heating systems and the condo fees are significantly reduced in these cases. That being said, Brookline has a lot of older buildings. My Coolidge Corner condo building was built in the 1890s. We have one oil tank and one boiler and we pay the association for usage. Well, oil prices are up (even though they've dropped in the last 48 hours) and this is starting to seriously impact the budgeting for all condo associations with shared heating systems. I would expect we can start to see condo fees increase over the next year with oil being quoted at $3.50 a gallon these days. Many places who budgeted from last year's consumption budgeted under $2.50 a gallon and you can quickly see where the budgets get hurt. This bears watching. It is important to work with your Buyer's Agent to do a thorough review of all condo documents and budget items, because the condo fee is a very large chunk of a home owner's monthly cash output.
As we evaluate a purchase price for a condo we need to look at the payments which are due monthly. First, we all know about the mortgage payment, but what is in it? There's the obvious principle and interest payment (unless you are Interest Only). There is also the required property tax payment which most mortgage companies pay directly. Some people still have mortgage insurance they owe because of small down payments at the time of purchase. Last but not least is the condo fee. Normally these condo fees include heat, hot water, master insurance payments, exterior maintenance and landscaping (snow removal) and some sort of rubbish removal fee. Some condos have individually metered heating systems and the condo fees are significantly reduced in these cases. That being said, Brookline has a lot of older buildings. My Coolidge Corner condo building was built in the 1890s. We have one oil tank and one boiler and we pay the association for usage. Well, oil prices are up (even though they've dropped in the last 48 hours) and this is starting to seriously impact the budgeting for all condo associations with shared heating systems. I would expect we can start to see condo fees increase over the next year with oil being quoted at $3.50 a gallon these days. Many places who budgeted from last year's consumption budgeted under $2.50 a gallon and you can quickly see where the budgets get hurt. This bears watching. It is important to work with your Buyer's Agent to do a thorough review of all condo documents and budget items, because the condo fee is a very large chunk of a home owner's monthly cash output.
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1 comments:
Gas is $3.50 at the pump; not delivered to your door. We just closed on a house and we had to pay the seller $4.14/gallon (based on a large oil company's meter reading and quoted price) on the 175 gallons that were still left in the our backyard tank.
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