Recurring (hidden) fees are easy to overlook

 

Part 2 of Investors rely on number crunching

 

HONOLULU ADVERTISER , July 24 2005

BY LISA SCONTRAS

Custom Publishing Group

 

If you are like most Hawaii residents saving for the purchase of your first home, you might occasionally enjoy in the “how much house can I afford” game by crunching the numbers each time the prevailing interest rate changes.

 

But basing the affordability of a new home (or condo) on the monthly mortgage payment alone will not paint the full picture — not by a long shot in some cases. Many home shoppers forget that their dream home may be subject to additional recurring maintenance fees imposed the homeowner associations.

 

These fees cover expenses that are typically incurred for common use areas. Intended to cover the upkeep of these common areas, the additional monthly expense to each homeowner collectively pays for general maintenance of the building, including insurance premiums, landscaping, repairs and care of the amenities such as a swimming pool or exercise room. Depending on where you live, some also include basic cable, sewer and water. Additionally, Hawaii state law requires condo associations to maintain minimum financial reserves — money in the bank — to deal with long-term expenses. Buyers need to remember to include maintenance fees in their financial calculations as they can add up to be a significant monthly requirement — ranging from several hundred to several thousand dollars.

 

It’s best to check out specifically what is included with the maintenance fee. Buyers can then determine if the value of the amenities is worth the monthly expense.

 

 

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view Part 1 of this article