The Hidden Costs of Owning a Condo and How to Avoid Them

The purchase price and the monthly HOA dues are the numbers everyone sees. But condo ownership comes with other costs that catch many buyers off guard. None of them are reasons not to buy. They’re reasons to read the documents and budget carefully. Here’s what to look for.

Special assessments

When a building needs a major repair its reserves can’t cover, the association can charge owners a one-time special assessment. Depending on the project, that can mean anything from a few hundred dollars to many thousands per unit.

How to avoid surprises: read the reserve study and recent board minutes before you buy. Underfunded reserves or talk of large upcoming projects are the clearest warning signs.

Rising HOA dues

Dues rise as insurance, labor and utility costs rise. In California, boards can generally raise regular dues by up to 20% a year without a vote of the owners. Ask how dues have changed over the past few years, and see our guide to what condo fees include.

Your own insurance

The HOA’s master policy covers the building, but you’ll need your own HO-6 policy for the unit’s interior, your belongings and liability. Many master policies carry large deductibles that can be passed on to owners, and earthquake coverage is usually separate. Price your policy before you make an offer.

Property taxes

In California, property taxes are based on your purchase price, at a base rate of about 1% plus local voter-approved bonds and assessments. Expect your tax bill to reflect what you paid, not what the previous owner paid.

Parking and storage

Most Downtown condos come with one or two assigned parking spaces, but not all, and an extra space or storage unit can cost thousands to buy or a monthly fee to rent. Confirm exactly what conveys with the unit, and check whether the building has guest parking; many Downtown buildings don’t.

Utilities the dues don’t cover

Dues often cover water, sewer and trash, but electricity, internet and sometimes gas are yours. Some buildings, such as Pacific Gate, sub-meter water to each unit. Ask for recent utility bills.

Move-in fees and building rules

Many buildings charge a move-in fee or refundable deposit, require you to reserve the freight elevator, and limit moves to certain days and hours. Renovations may need HOA approval and a city permit. See our guide to condo renovation rules.

Costs when you sell

Selling brings its own costs: commission, escrow and title fees, HOA document and transfer fees, and in San Diego County the documentary transfer tax, customarily paid by the seller.

A simple way to budget

Add up your mortgage, HOA dues, property taxes and HO-6 insurance for your true monthly cost, then keep a cushion for repairs inside your unit and the chance of a special assessment.

Want help reading the documents?

The Neuman Team has specialized in Downtown San Diego condos since 1981, with more than 7,400 closed sales, and has been #1 in 92101 for homes sold since 2000. We know which buildings have healthy reserves and which have projects coming. Call (619) 595-7025 or browse our building guides.

Frequently Asked Questions

What is a special assessment on a condo?

A one-time charge to owners when the association needs money for a repair or project its reserves can’t cover. The reserve study and board minutes usually show whether one is likely.

What costs come with owning a condo besides the mortgage?

HOA dues, property taxes, an HO-6 insurance policy, utilities not covered by the dues, possible special assessments, and repairs inside your unit.

Do I need my own insurance if the HOA has a master policy?

Yes. An HO-6 policy covers your unit’s interior, belongings and liability, and can cover your share of the master policy’s deductible.