So you’ve decided that you’d like to buy a condo. Congratulations! Condominium life can be rewarding, safe, and social.
Like a house, factors such as location (proximity to schools, restaurants, shopping and public transit) play a significant role in choosing where to live.
However, purchasing a condo, while similar to buying other real estate, differs in many ways from buying a traditional house. As a condo owner, you own your unit, and you also pay a share of the common expenses to maintain the building and its amenities. This is known as a common expenses fee or maintenance fee.
There are several factors to consider when you decide to purchase a condo because unlike a house, you will be joining a community where all the unit owners in the condominium need to work together to ensure the building in which they live remains safe, secure, and well-maintained.
Here are some things to consider when looking for that perfect condo:
A resale condo has the advantage that it’s already been built (so you can physically visit the unit). The unit will be ready to move into when you are. The common expenses fee is likely well established, and you will be able to find out how frequently those fees have gone up or whether numerous special assessment fees have been levied in recent years. This information is contained in a document called a “status certificate.” On the other hand, some of the amenities might be outdated, and so it may require more maintenance and might have an older, less modern design.
If you buy a new condo that’s still under construction, you have to examine floor plans and perhaps one or two model suites to get a sense of what your home will look like. It may require a little more research to find out what the common elements will be, and what the per-unit costs for maintaining those amenities are expected to be. You will likely need to have a real estate lawyer carefully examine the agreement to purchase and its terms. It’s also possible that the construction may be delayed, forcing you to rent or live with family until the building is finished. But when you move in, everything will be brand new, appliances will be under warranty, and you may have the opportunity to customize certain elements of the unit to your taste. Additionally, as an original owner, the value of your investment stands a good chance of increasing more quickly than one in an older unit.
Condos differ considerably in what is available to owners in the shared areas of the building. Some examples include:
You will need to look at the amenities (and the accompanying common expenses fee) and determine whether the condo fits your lifestyle. Some condos prohibit pet ownership, so if you’re a dog or cat lover, you may want to avoid those buildings. Examining the condominium’s rules is an essential part of deciding whether a particular condo is for you.
All condo owners must contribute a monthly fee towards the upkeep of the building, its facilities, and amenities. That fee can vary greatly depending on what is considered a common element in the building. Generally speaking, the more amenities that a condo features, the higher the fee will be. Some condos will include electricity or cable TV, for example, as common elements. Fees in those buildings will likely be higher than in those where owners are responsible for their own utilities. In terms of budgeting, it’s critically important to know not just what the fees are, but whether they are regularly increased – and by how much.
When a condo is undergoing a renovation or has suffered a serious maintenance issue (such as a flooded parking area), the condo board can issue a special assessment fee. These fees can be quite expensive – in the tens of thousands of dollars – per unit, so it’s worth investigating whether special assessment fees have been commonly levied in the building you’re considering, or whether one is soon to be expected.
Sometimes, the placement of the unit you’re considering may be a factor in its livability. Some factors to consider are:
Also, it’s worth finding out how many of the units in the condo are actually owner-occupied. Many buildings today may have up to 70% of their units occupied by renters. While this may not be an issue, it likely means that turnover in those units could be higher, and you may have new neighbours more frequently than you expect.
It’s also worth checking who makes up the majority of residents in the building. If you have a family with young children, do you want to move into a condo occupied primarily by younger, single people? The opposite is also true. Condos are small communities; it’s important to feel that you are welcome in the community in which you choose to live.