A look at South Florida condo maintenance costs
Buyers of preconstruction condos in South Florida should be prepared to pay an average monthly maintenance fee of 76 cents per square foot to live in a new unit in one of the more than 225 towers proposed to be developed east of I-95 in Miami-Dade, Broward and Palm Beach counties.
As part of this, the median monthly maintenance fee for a proposed South Florida condo is scheduled to be 69 cents per square foot, according to the April 2014 Developer Pricing Survey conducted by the preconstruction condo projects website CraneSpotters.com. (For disclosure purposes, my firm operates the website.)
This means a new South Florida condo unit with 1,000 square feet will come with an average monthly maintenance bill of $760 – and a bill of $690 on a median basis – before any reserve account payments are factored in. Maintenance fees at newly proposed individual condo projects are scheduled to range from $2 per square foot for the proposed 18-story, 10-unit Glass project in South Beach to less than 10 cents per square foot at the three-story, five-unit L’Uccello condominium in the Miami neighborhood of Coconut Grove, according to the Developer Pricing Survey.
It is difficult to accurately measure the monthly maintenance fee for existing condo units east of I-95 in South Florida, however.
Generally, a mainland condo project in South Florida will charge a monthly maintenance fee between 50 and 60 cents per square foot. On the barrier island, the monthly maintenance fee is typically between 70 and 80 cents per square foot. Condominium associations collect maintenance fees – typically on a monthly basis – from unit owners based on the square footage of their respective condos. The maintenance fees, which are set by a condo project’s board of directors as part of an annual budget, are collected from unit owners and used to pay for security, management, upkeep, amenities, insurance and property taxes.
Maintenance fees tend to go up in the future as a result of inflation, expanded services and wear-and-tear.
A closer analysis the survey results reveals Miami-Dade County has the highest projected average monthly maintenance fee at 77 cents per square foot. Broward County is second based on a projected monthly average maintenance fee of 74 cents per square foot. Palm Beach County is a distant third at 44 cents per square foot.
On a market-by-market basis, Miami Beach is the most expensive with an average projected monthly price of $1.23 per square foot. Sunny Isles Beach ranks second at 87 cents per square foot. Key Biscayne is third with an average monthly maintenance fee of 83 cents per square foot.
Rounding out the top five areas with the highest projected maintenance fees is the Hollywood-Hallandale Beach market at 81 cents per square foot and a tie for fifth between Aventura and Bal Harbour-Surfside-Bay Harbor Islands, which have projected monthly maintenance fees of 74 cents per square foot.
It is worth noting the Greater Downtown Miami market ranks seventh based on a monthly maintenance fee of 64 cents per square foot. The Downtown Fort Lauderdale and Fort Lauderdale Beach market ranks 10th at 58 cents per square foot.
At the bottom of the list is North Palm Beach, which has a projected average monthly maintenance fee of 44 cents per square foot.
The unanswered question going forward is whether preconstruction condo investors who intend to rent out their new units in hopes of realizing a return will continue to purchase new residences, given the rising cost of monthly maintenance fees in South Florida.
Peter Zalewski is real estate columnist for The Real Deal who founded Condo Vultures LLC, a consultancy and publishing company, as well as Condo Vultures Realty LLC and CVR Realty brokerages and the Condo Ratings Agency, an analytics firm. The Condo Ratings Agency operates CraneSpotters.com, a preconstruction condo projects website, in conjunction with the Miami Association of Realtors.