When it comes to shelling out big bucks for a condo, most buyers have an exhaustive list of pros and cons. However, condo maintenance fees are a detail that is often overlooked or glossed over entirely.
Condo maintenance charges are a whole different ball game compared to conservancy charges for HDB flats. You should expect to pay at least four times the amount in monthly maintenance fees.
Breakdown of condo maintenance fees
Depending on the condo, maintenance fees are either paid monthly or quarterly. The fees are split into two components managed by the condo: the sinking fund and management fund.
Sinking fund
A condo’s sinking fund is a reserve pool of money to tackle larger, non-recurring expenses required to maintain the general upkeep of the condo and preserve its value. Condo management will draw from this fund to finance repairs or improvements every few years, like a new coat of paint or installing a better overall security system.
Management fund
In contrast to the sinking fund, a management fund pays for recurring expenses. Examples are lift repairs, cleaning and maintenance of amenities such as the pool and gym, payroll of condo staff, and insurance payments.
How are the fees determined?
Monthly maintenance for a condo varies. It is based on the unit’s assigned share value, which is based on the size of the unit. Simply put, the bigger your condo, the higher your maintenance fees. New mass-market condos typically have fees of about S$70 to S$80 per share value.
How are the fees allocated?
During the condos’ annual general meeting (AGM), condo owners and stakeholders convene to discuss the various challenges faced during the year and changes to be implemented. This includes revision of the maintenance fees (if any).
At the AGM, you can voice your concerns and clarify what your money is being used for. You can also ask why that one lift always seems to be out of order. Attending the AGMs is important, as mismanagement of condo funds could potentially negatively impact the value of your property.
3 ways to save on condo maintenance fees
It goes without saying that maintenance fees will be higher in Core Central Region condos such as in Newton, Orchard or Tanglin.
However, if you’re looking at purchasing a much older condo, do keep in mind that they cost more to upkeep. If the conservancy fees are suspiciously cheap, you’re probably looking at living with rundown facilities that lack some much-needed maintenance.
1. Consider which amenities you actually need
Condos with lots of facilities – you know the fancy ones with a concierge, bowling alley, karaoke lounge and mini-golf course – come with heftier conservancy fees.
Yes, living at these condos automatically gives you bragging rights to tell your friends just how amazing your home is. But all of that doesn’t come free.
Sure, having an ice therapy room right in your backyard is definitely cool (yes, I made a pun), but how often will you use it before your bank account starts icing you out?
Consider how often you’ll use these facilities before pulling the trigger on that apartment with five swimming pools and a state-of-the-art gym.
2. Pick a smaller condo unit
To save on maintenance fees, consider opting for a slightly smaller unit with a lower share value. For example, let’s assume your condo has a monthly maintenance fee of S$75 per share value. A 101 sqm apartment will have a share value of 7, whereas a 100 sqm unit has a share value of 6.
You won’t feel the 1 sqm (around 11 sq ft) difference in space, but you’ll save S$900 annually on fees.
| Unit size (square meters) | Share value (SV) | Monthly maintenance (S$75/SV) | Annual fee |
| 50 and below | 5 | S$375 | S$4,500 |
| 51 to 100 | 6 | S$450 | S$5,400 |
| 101 to 150 | 7 | S$525 | S$6,300 |
| 151 to 200 | 8 | S$600 | S$7,200 |
| 201 to 250 | 9 | S$675 | S$8,100 |
| 251 to 300 | 10 | S$750 | S$9,000 |
Confirm the exact share value of your unit with your agent, so you won’t get sticker shock when the bill comes.
3. Choose a bigger project
Small, exclusive condo projects tend to have higher maintenance fees. Larger developments can split their costs amongst more units. However, make sure you confirm this when purchasing the unit. If you live in an integrated development comprising residential units, offices, and shops in a single development, there is a fee calculation.
This is because mixed-use sites share the maintenance cost amongst all the tenants, including retail shop owners and residents of the development.
Conclusion
Condo maintenance charges are a monthly recurring bill that will eat into your net profit if you decide to sell or rent out your property. It’s important you factor in how much you’re paying monthly in fees to keep an accurate financial score on your property.
Also, even though you’re paying a monthly maintenance fee every month, you’re still liable for any incurred expenses within your own residential units. If you need to hire a plumber or electrician to repair anything within your home, that’s on your tab.
How much are you paying in condo maintenance fees? Let us know in the comments section below or on our Facebook post.
If you found this article helpful, check out 4 reasons why you shouldn’t default on your condo maintenance fees and Condo maintenance fees and unit sizes: how much is too much?
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