Sharing Daily Discoveries About Personal Finance And Business Topics

Focusing On The Monthly Fee or The Total Expense Overall

I found this conversation to be kind of awkward in regards to a person who was interested in buying a condo with a strict budget in mind. Essentially she wanted to pay under $300,000 and was really adamant about paying less than $200 when it come to the strata/maintenance fee in the building. Essentially the logic is she wanted to have more money leftover at the end of the month and a high fee would definitely eat into that budget.

That was the weird thing though. For example, given the choice if there were two identical buildings where one cost say $290,000 with a $150 fee per month versus a building that cost $250,000 a month with a monthly fee of $250 a month she mentioned she would still go with the one with the lower maintenance fee as it is cheaper. I was thinking to myself why would a person say that? What makes it even stranger is that she was even saying she probably intends to move again in like 10 years.

If you think about it, with the higher maintenance fee in like 10 years that would mean one paid about an extra $12,000. However, since the property was $40,000 less that means in ten years you would still be up about $28,000. It makes me wonder why in that case one would focus so much on the monthly fee as opposed to focusing long term on which one has the best value.




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