A family was looking for a condo in Cincinnati for the first time. Their budget was around $250,000. They compared listings based solely on the sale prices, thinking they could check the management fees later. It wasn't until just before signing the contract that they realized the difference in management fees between two properties was over $150 a month. Only then did they start to investigate why the fees were different.

The median condo management fee in Ohio is $368 per month (hoacosts.com). In Cincinnati, for example, the Witshire Glen condos in Anderson Township have fees around $253 per month (teamsztanyo.com). Buildings with more amenities and newer constructions can exceed $400. The differences in management fees ultimately stem from the age of the building, the amenities offered, and the size of the reserve fund.

Management fees cover exterior maintenance, master insurance, common area management, landscaping, and trash collection. Contributions to the reserve fund are also included. This family overlooked the importance of the reserve fund. The property with the lower management fee also had a lower allocation for the reserve fund. Conversely, the property with the higher management fee had a solid reserve fund. It's essential to look not just at the amount but also at what is being accumulated within it.

In 2022, Ohio revised its condo management regulations with Senate Bill 61. Previously, it was mandatory to allocate at least 10 percent of the budget to the reserve fund. This fixed percentage requirement has now been removed. Instead, the board is responsible for determining the amount needed for major repairs and reflecting that in the budget. If a majority of residents agree in writing, they can even waive contributions to the reserve fund (williams-strohm.com). This means that the board's judgment and financial management skills have become more critical than before.

On the other hand, the standards set by mortgage lenders are becoming stricter. Fannie Mae has required that at least 10 percent of management fee income be allocated to the reserve fund. Starting from January 4, 2027, this requirement will increase to 15 percent (governingdocs.dev). This is in contrast to the relaxed Ohio regulations. Buildings with insufficient reserve funds may be classified as non-warrantable condos, which can lead to loan denials or worse terms.

The national average for management fees ranges from $200 to $400. Condos with many amenities can see fees rise to $500 or even over $1,000 (nar.realtor). Cincinnati has areas preferred by Korean families, like those in Anderson Township. It's advisable to consider both school district ratings and management fees together. School district boundaries change frequently, so it's essential to verify the specific address before purchasing.

Some families are moving from out of state. If they carry over their previous property tax expectations, they may miss important details. Property taxes in Ohio vary by county. Investors looking for rental income should also check for rental restrictions under CC&Rs. Some buildings may completely prohibit rentals or limit the number of units that can be rented, so it's crucial to review these regulations before signing a contract for investment purposes.

Ultimately, this family chose a property with slightly higher management fees but a solid reserve fund. Here are the items to check before signing a contract:

• The budget and reserve fund ratio recently adopted by the board
• Whether a reserve study has been conducted
• Whether there has been a resolution to waive reserve contributions
• The percentage of delinquent units and any litigation history
• Recent special assessment history

A low management fee does not automatically mean a good property. To avoid unexpected special assessments, it's essential to check the reserve fund as well. When comparing properties, it's useful to lay out the management fee statements side by side and examine how much is allocated to each item. Tax and loan conditions can vary by region and financial institution, so it's advisable to verify based on individual properties. This article does not constitute investment or legal advice, and consulting a professional before making any contracts is recommended.