While consulting in Burlington, a client once asked if the reserve fund is really that important when comparing a newly built condo complex to one that is over 20 years old. When you place the two side by side, the answer becomes clear.

The median condo management fee in Middlesex County, where Burlington is located, is $371 per month. When looking at the greater Boston area, the range can vary from $200 to $1,000 per month. Newer complexes often have lower initial management fees because their reserve funds have not yet accumulated sufficiently. In contrast, while older complexes may have higher management fees, they have had more time to build up their reserve funds, allowing them to handle major repairs without special assessments. It's important to understand how these two types differ within the same budget.

Massachusetts General Law Chapter 183A, Section 10(i) states that condo associations must maintain an adequate replacement reserve fund within their common expenses. However, it does not mandate the conduct of a reserve study. Therefore, whether it's a new or an older complex, the only way to know how much reserve fund has been accumulated is to check the financial statements directly.

The HOA fee items are not significantly different between the two types. Basic expenses include maintenance of the exterior and roof, master insurance, landscaping and trash collection, operating costs for common facilities, and contributions to the reserve fund. The difference lies in how much has been allocated to the reserve fund within those expenses.

• Reserve fund balance and recent 5-year special assessment history
• Trends in management fee increases and future budget plans
• Rental restrictions and pet policies

These items should be checked for both new and established complexes. Mortgage lenders also review the delinquency rate of the building, the reserve fund ratio, and any ongoing litigation, and if they fall short of the criteria, they may classify it as a non-warrantable condo, making loans more difficult to obtain. Even if a new complex appears to have low management fees, a lack of reserve funds could lead to a sharp increase in fees or special assessments within a few years. Conversely, while an older complex may seem burdensome in terms of management fees, if its financial structure is stable, it could actually be a more predictable choice.

For investors looking to benefit from both rental income and capital appreciation, a comparison between new and established properties can be made. New constructions may seem advantageous for rental yield calculations due to their lower initial management fees, but one must consider the possibility of management fees rising in a few years as the reserve fund is filled. Established properties already reflect higher management fees, which may lead to more stable yield calculations, but if the time for replacing old facilities is approaching, that cost could come as a special assessment. Rather than concluding that one option is definitively better, it is practical to directly compare the reserve fund balances and recent capital expenditure plans of each building.

Families moving to Burlington from other states should avoid judging based on property taxes or insurance rates from their previous locations. In Massachusetts, the master insurance premium is often included in the condo management fees, which can reduce the burden of separate insurance for individuals. Families looking for preferred school districts among the Korean community may find that Burlington schools generally receive good ratings, but school district boundaries can change frequently by address, so it's advisable to verify the exact assigned school for any condos of interest before purchasing.

Burlington, located just outside of downtown Boston, has many condo complexes that offer relatively ample parking and a quiet residential environment, which is worth noting. However, investors targeting rental income should also consider that rental demand may be somewhat limited compared to urban areas due to lower accessibility to the city center. For those looking to reside, this quiet environment could be an advantage, making it a region where decisions may vary based on the purpose of the purchase.

Ultimately, what matters more than the age of the complex is how systematically the reserve fund has been accumulated. This article does not constitute investment or legal advice, and it is recommended to consult with professionals before making any actual contracts.