What sets condos apart (in the same general location) is the monthly HOA fees. Monthly condo fees could range from $200/month to $4,000 a month or more. When buying a place with a HOA you really need to do your due diligence. As part of the process you will receive a copy of the HOA's financial statements. You need to dig into those and look at common areas like the streets and the pool and look to see how much expected lifetime remains, the current estimated future costs, and the level of the reserves (do they have money in the bank or not).
> Monthly condo fees could range from $200/month to $4,000 a month or more.
Older high rise buildings have much higher fees, this is unfortunately true. (Soon as you have interior hallways and elevators...)
But as you alluded to, in general if you go through the finances of townhome complexes, the HOA dues are (often mandated by law) just creating a cash reserve to cover future expected maintenance.
Or to put it another way, realistically everyone who owns a home needs to set aside a few hundred a month to save up to buy a new roof, siding, paint fence, do pest removal, an so forth. The HOA in a townhome complex is a forcing function that requires people (again in some cities by law!) to calculate what the expected maintenance costs are going to be and to then save up accordingly for them using some low interest safe investment vehicle (or just cash, but IIRC my HOA has its money in some 2 or 3% interest bearing accounts).
> and the level of the reserves (do they have money in the bank or not).
This is the key part, a healthy HOA has reserves for the next n years of issues and has reasonable HOA dues to keep those reserves at a healthy level. Basically they know some large bill is, statistically likely, to come up, which will drop the reserves down, and the HOA dues are set at such a level as to refill the reserves before the next big bill comes around.
This is the math that all home owners should be doing.
Most people should pay themselves HOA++ so that they have a maintenance account when needed.
The problem is if you don’t you just hurt yourself a bit - but a badly managed HOA can hurt you surprisingly when it’s discovered that they have no money at all for major maintenance items and trigger a sudden assessment.
This is the reason my elderly parents still live in an oversized home for their current needs. They've looked at downsizing to a townhome or condo, but comparing everything they would lose to sharing noise through walls, HOA fees despite still being responsible for mowing and shoveling snow, and everything else it just doesn't make sense for them.
