Are you thinking of buying a condo? It is a great way to get your foot on the real estate ladder here in the Okanagan. It has never been easier or cheaper to borrow money to finance a home purchase. So, what are you waiting for?
One question we often get asked by first time home buyers is “what are Strata Fees”, what are they and why do I pay them?
There are a lot of new developments going up in and around Kelowna. You may have seen them as you drive around. The great thing about living in a condo is that they are often in great locations close to public transit and amenities. The other plus is that you are not chained to yard work but can spend your time visiting the pool, the fitness centre and the lounge area that are all on your doorstep in your condo community! Okay so let’s break down what is involved when you pay your “Strata Fee”.
Strata Fee is……
Your monthly strata fee is money that is collected by the strata corporation to be used to pay for the cost of expenses of the community. Each individual fee is usually found by adding up all of the strata’s expenses and dividing that number by the unit entitlement of your strata lot. The larger square footage of your home, the bigger your fee. Interestingly, the size of your balcony or deck does not affect this as it is not included as finished living area in your square footage calculation. So, if you are buying a condo with a large balcony you won’t be paying extra!
How much is a typical strata fee?
Strata fees vary greatly from city to city and building to building. There are many variables like the type of management of the strata and the amenities that are offered. In Kelowna, strata fees range from approximately $0.20/square foot, up to around $0.50/square foot, with $0.35 being the average. The higher end is typical for buildings with ‘wet’ amenities such as pools, hot tubs, water features and other luxurious expenses like 24-hour concierge service.
Where does the money go?
There are two funds that every strata corporation in BC must maintain: an operating fund and a contingency reserve fund (CRF). The operating fund is what is used to pay for common expenses that maintain the building or occur more than once over the course of a year. This includes building insurance, property manager’s fees, gardening, garbage collection, water, maintaining common property, upkeep of amenities, cleaning, repairs, etc. The CRF is the fund that is typically used to pay for expenses that occur less than once a year, or more unusual expenses. This might include a lobby upgrade, new roof, new gutters, etc. When looking at purchasing a condo – it is always important to be informed of the current CRF amount! If that amount is low and an expense comes up, you may have to pay extra to the strata to cover the costs.
What ever you decide, buying a condo here in the central Okanagan is a good investment – if you choose not to live in it yourself, you may want to rent it out and become a Landlord – you will still have to pay for the strata fees as the owner/landlord – renters do not pay strata fees.
If you have any questions, feel free to contact us any time at Stone Sisters – ReMax Kelowna – it is a good idea to have a knowledgeable realtor help you when looking for a condo to purchase as they can steer you through obtaining and reading all of the pertinent strata documents you will need when making an offer on a condo.
Check back here regularly for more tips and information on buying real estate here in the Okanagan
Shannon & Tamara Stone
Stone Sisters – RE/MAX Kelowna