Recently, I've been hearing a lot about insurance premium notices suddenly jumping nearly double. This is coming from the Lexington condo association. With rising reinsurance costs and litigation risks, the master insurance premiums for condos are increasing significantly with each renewal. According to the Insurance Information Institute, this trend is not limited to Massachusetts; it is a nationwide phenomenon. However, the insurance structure for condos is more complex than for single-family homes. The master insurance held by the association and the HO-6 insurance held by individuals move together. When one goes up, the other tends to follow.

Let's start with the prices of Lexington condos. Based on Zillow's 2026 data, the median price for condos is around $525,907. Compared to the median price of single-family homes in the same area, which is $1.75 million, the gap is significant. This gap serves as a barrier to entry for investors. Lexington is considered a neighborhood with a high school district rating. The school district, which includes Lexington High School, ranks highly according to GreatSchools. This means that even condos have decent resale potential due to steady demand for actual residence. However, school district boundaries change frequently, so it's advisable to check the assigned school for the specific address before purchasing.

Massachusetts does not legally require structural inspections for condos like Florida does. However, the trend is moving in a similar direction. Following the Surfside collapse, discussions are ongoing in New England states like Massachusetts, Connecticut, and Rhode Island to strengthen regulations regarding structural safety and reserve funds. Just because it's not mandated by law doesn't mean you should feel secure. Fannie Mae and Freddie Mac effectively require the same standards in their loan assessments. If the reserve fund is less than 10% of the budget, it may be classified as a non-warrantable condo. This can block conventional loans, leaving only higher-interest loans available.

The median condo management fee in the Boston area is about $386 per month, according to a LendingTree survey, with nearly 30% of all condo owners paying over $500 a month. Across Massachusetts, management fees typically range from $200 to $400 per month, but buildings with many amenities can exceed $1,000. In recent years, Boston condo management fees have risen by an average of about 3.2% annually. This is because the increase in insurance premiums is directly reflected in management fees.

When considering condos for investment, there are specific items to check. You should review the financial statements and budgets from the past 2-3 years. It's also important to look at the results of the reserve study. Check for any pending or scheduled special assessments. It's crucial to look for any history of lawsuits or disputes in the association meeting minutes. Rental restriction regulations are also important. If there are rental caps or minimum rental period conditions, it will affect the calculation of investment returns. The NAR's condo buying guide also presents the same items as a checklist.

If you are moving from another state to Massachusetts and looking for condos, keep in mind that the property tax calculation method is different. In Massachusetts, property tax rates are set at the individual town level, not by county. Lexington tends to have a higher tax rate compared to nearby towns, so estimating based on the previous state's standards may lead to different monthly burdens. Since condos also incur separate management fees, it's accurate to calculate the total holding costs by adding property tax, management fees, and insurance premiums.

From a rental demand perspective, Lexington is part of the Boston commuting zone and has a strong school district premium, so rental demand is generally steady. However, some associations have rental caps or approval processes, so it's essential to check the regulations before purchasing. If resale is a consideration, it's also important to check if there's a history of being classified as non-warrantable, meaning the loan approval process has been smooth in recent years.

Ultimately, investing in a condo is not just about looking at the price tag. You need to consider the monthly management fees, any potential special assessments, and the availability of loans to calculate the actual return on investment. This article is intended for general informational purposes, and actual investment decisions should be made after consulting with real estate and accounting professionals.