Urban centres, such as Saskatoon, Calgary, Edmonton, and Winnipeg, offer a wide variety of homeowner options. Condos in particular, are extremely appealing, especially as a single person or if you’ve recently retired and escaped the suffocating grip of your children. They are typically lower maintenance, less money (usually) and have added value in the shared amenities. Such as a pool, library, or workout facility.
“That sounds amazing, why would you ever buy a house, when you can have a condo instead?”
There are a few things to consider when purchasing a condo. Here is a checklist to consider as you start your search.
Find an experienced realtor
If you have decided that a condo is right for you, make sure you have an agent who’ll have your best interests in mind. There are many things to keep track of when buying a condo that an experienced realtor can help you with. Such as:
- Reviewing and understanding the condo association by-laws and documents.
- Finding reputable condo developments that do not have any financial concerns or pending litigation issues that you do not want to be a part of.
- Finding referrals or information to see if there are any community issues in the condo complex.
- And also, which condo developments have fared best in resale value.
There is some vital information you should know before committing to a long term investment such as this. Some main items to research and find out are:
- Review the condo association fee policy. On top of your mortgage, you will be responsible to pay monthly dues for upkeep, amenities and other maintenance issues in the common areas of the condo.
- Finding out who manages the upkeep is crucial, as you will want to keep your property well-maintained. It would be extremely frustrating to pay association fees only to have the amenities fall into poor condition and ultimately affect your resale value.
- Review the condo bylaws. Typically the condo association is a non-profit organization set up to manage the private, planned community. This association is governed by a board of directors, who are elected by members of the condo. This association has to operate and abide by the set out bylaws. An example of some of these bylaws include:
- How often the condo association has to meet.
- How the meetings are conducted
- The duties of each board member
- How many people are on the board and length of term
- Nomination and Voting rights of the members
- Review the condo regulations (CC&R). This is the legal document that explains the community guidelines. The CC&Rs are basically the rules of your neighbourhood. They indicate what you can, can’t or must do in respect with your home. It is important to know these rules or regulations the condo may enforce, such as: noise complaints, booking common areas, insurance requirements, and any other resident responsibilities. If you don’t abide by these rules, the condo association has the ability to fine you for violations.
When buying a condo make sure you ask about “special assessments.” These assessments are funds that the condo association requires to tackle a significant project. It is typically voted on by its members (that’s you). You need to be aware of this because you could end up paying more in association fees to cover this cost. For example: The stucco on the outside of your condo is cracking and failing. In order to cover the costs to replace the stucco, the condo assesses a levy onto the condo unit owners to pay for the repair. For example, the condo repair is costing $250,000. There are 60 suites in the condo, each unit owner will have to pay approximately $4200 in additional fees for this repair.
A well run condo will stay on top of the regularly scheduled maintenance to avoid these increased costs, but there may be surprises that need to be addressed. Looking through the condo’s financial reports with your accountant will help you avoid getting stuck with a big bill for wear and tear on a building you just moved into.
“Okay, after hearing that all, I’m unsure why you would want to buy a condo. What are the benefits of living in a condo versus a home?”
Assess your lifestyle
Do you dislike mowing the lawn? Or staining the fence and siding of your house? Or paying for new shingles? If you answered yes to these questions, condo living might be right for you. That being said, having a large backyard or not sharing common walls might also be what you desire.
Let’s take a quick look at some of the pros and cons to see if this is the lifestyle you are searching for.
- Less maintenance, more affordable
- Increased sense of security
- More social atmosphere
- Investment risk
You are in ownership of the property together with your neighbours. If one or many of your fellow condo owners fail to pay their dues the entire community may suffer financially.
- Less privacy, more renters
Constant moving vans with new renters along with common walls can make living in this lifestyle – less private.
- Parking and less storage
Lugging your groceries up the stairs across the parking lot and storing your golf clubs and bikes can be a little cumbersome.
- Condo Association (HOA) rules and fees
The rules and restrictions that the HOA can place on the community can be frustrating and sometimes can end up in fines or foreclosure if severe enough. Also the fees go one direction. Up.
In the end
Condominiums can be a great investment for the right buyer, in the right location, at the right time. They can be more difficult to sell when the economy is down. That being said, deciding on what lifestyle you want is most important – to make sure you will enjoy this style of living. When you have decided that, you just need to make sure you do your due diligence beforehand and check out the HOA Bylaws, CC&Rs (Covenants, Conditions and Restrictions), and any insurance and tax situations. These are complicated documents and tasks, so having a lawyer and experienced realtor in your corner is a huge asset. After that is done, you can kick your feet up and enjoy your new pad. Cheers!